On July 29, 2024, the Securities and Exchange Board of India (SEBI) announced the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Third Amendment) Regulations, 2024. These amendments update the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, and became effective on July 30, 2024.
Key Changes:-
· Changes in Shareholding Disclosure Requirements
The 2024 Regulations introduce modifications to Regulation 21(1), requiring recognized stock exchanges and clearing corporations to publish their shareholding patterns on their websites every quarter. This disclosure must adhere to the format outlined for listed companies under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Previously, this regulation mandated that stock exchanges and clearing corporations report their shareholding patterns to SEBI within fifteen days after the end of each quarter, following a format specified by SEBI.
· Amendments to Core Settlement Guarantee Fund Committee
Changes in Regulation 29(2)(a) remove the requirement for stock exchanges and clearing corporations to establish a Core Settlement Guarantee Fund Committee within their Functional Committee. This alteration simplifies the regulatory framework for these entities.
· Adjustments in Recognition and Advisory Committee Rules
The revisions also affect Part III of Form A in Schedule I, eliminating the need for clearing corporations to disclose rules about direct elections by clearing members to the Advisory Committee of the governing board. This detail has been removed from the application process for recognition or renewal.
· Updated Guidelines for Monitoring Shareholding Limits
According to the amendments in Schedule II, Part G, Para 1(c), listed stock exchanges are now required to follow SEBI's current guidelines for monitoring shareholding limits, replacing the Circular from January 1, 2016.
· Removal of Advisory Committee Selection Provision
Additionally, the amendment in Para V of Part H in Schedule II removes the provision regarding the selection of trading and clearing members for the Advisory Committee to the governing board.
Conclusion
The 2024 amendments to SEBI’s regulations represent a significant shift towards increased transparency and streamlined processes for stock exchanges and clearing corporations. By mandating quarterly online disclosures and eliminating certain committee requirements, SEBI aims to enhance the clarity and efficiency of financial market operations. These updates are expected to simplify compliance for market participants and align regulatory practices with current industry needs, fostering a more transparent and effective regulatory environment.
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