SEBI Sets Up Committee to Review Clearing Corporations' Ownership Structure

SEBI has formed a committee, chaired by Usha Thorat, to review the ownership and economic structure of clearing corporations. The committee aims to ensure these corporations function as resilient, independent risk managers. Key concerns include broadening the list of eligible investors, altering shareholding caps, and ensuring financial independence.

In a significant move, the Securities and Exchange Board of India (SEBI) announced on Tuesday the establishment of a committee aimed at reviewing the ownership and economic structure of clearing corporations. This initiative seeks to ensure that these entities operate as resilient, independent, and neutral risk managers.

The committee will be chaired by Usha Thorat, a former Deputy Governor of the Reserve Bank of India (RBI). SEBI highlighted the growing importance of clearing corporations amid the substantial growth of Indian securities markets in recent years.

The committee's mandate includes examining the feasibility and expanding the list of eligible investors in clearing corporations. Additionally, it will consider the need to alter the caps on shareholding of various entities and suggest ownership structures that suit an interoperable environment. SEBI emphasized that these alternatives must account for the periodic capital needs and ensure sufficient liquidity during market stress.