Sebi plans to overhaul 'fit and proper' norm

May put threshold for shareholders owning up to 2% in stock exchanges

The Securities and Exchange Board of India (Sebi) is likely to remove the ‘fit and proper’ requirement for shareholders owning up to two per cent in stock exchanges, said a source privy to the development.

The current rules don’t allow an entity to directly or indirectly own shares in an exchange, unless declared ‘fit and proper’. Sebi has listed different scenarios for monitoring and complying with the norm, based on shareholding thresholds of two per cent, five per cent and 15 per cent. 

Now, if an entity wanted to acquire shares of up to two per cent, the stock exchange