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Thursday, September 07, 2006

FDI policy on equity stake in bourses soon: Govt

The government today said it will soon decide whether foreign players can buy stake in Indian stock exchanges, which would make it clear if bourses can invite foreign strategic investment while divesting brokers equity in them below 49 per cent, in line with SEBI guidelines on demutualisation.

"The FDI policy on the issue will soon be a reality," a senior Finance Ministry official told reporters on the sidelines of inauguration of BSE regional office here.

While the finance ministry will give inputs, the commerce ministry will frame the FDI policy, he said.

The Finance Ministry is yet to take a view on allowing FDI in stock exchange, he said.

While the FDI policy will be framed by the Union government, the market regulator SEBI would issue regulations on mechanism of demutualisation, which basically means that trading activity and the management should be controlled by separate entities.

Many stock exchanges like BSE are awaiting the FDI policy and regulations on demutualisation from SEBI.

BSE had reportedly made it clear that 26 percent of the stake would be sold to strategic investors and the remaining 25 per cent through an IPO.

Over a month back Nasdaq official met their counterparts in BSE, giving rise to speculation that the tech exchange would pick up a stake in it.

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