Market regulator the Securities and Exchange Board of India (Sebi) today said Limited Liability Partnerships (LLPs), a hybrid between a partnership firm and company, could get membership of stock exchanges.
Following requests from various stock exchanges to permit LLPs to be admitted as members to enable them to get registration as stock brokers, Sebi said "stock exchanges may consider granting membership to LLPs".
The Securities Contract Regulation Rules, 1956 (SCRR) is only clear on Limited Liability Companies (LLC) and partnership firms being eligible to be admitted as members of stock exchanges.
The regulator said that in this context it may be stated that LLPs are akin to LLC and partnership firms.
It asked stock exchanges to make necessary clarificatory amendments to the relevant bye-laws, rules and regulations for the implementation of the decision.
The Parliament has put in place a legal framework for LLPs.
LLP is a corporate business vehicle that provides benefits of limited liability while allowing its members the flexibility of organising their internal structure as a partnership firm.
As per the latest data, there were 5,501 registered LLPs in the country.
