Mumbai: Capital market regulator SEBI on Monday cleared the decks for listing of bourses and made it mandatory for them have 51 percent public holding, but banned brokers from boards.
It also capped individual holding at 5 percent and fixed their minimum networth of bourses at Rs 100 crore. Besides, restrictions have also been placed on salaries of key management.
Allowing listing of bourses was decided after considering the much-debated Bimal Jalan Committee recommendations which had not favoured listing of stock exchanges.
Significantly, Sebi said an exchange cannot be listed on itself, which means if the BSE were to go public, it has to do so on the NSE or another exchange and vice versa.
"The stock exchanges will have diversified ownership and no single investor will be allowed to hold more than 5 percent except the stock exchange, depositories, insurance company, banks or public financial institutions which may hold up to 15 percent," Sebi said after the board meeting.
"The Board of the stock exchanges/clearing corporations will not have any trading member/clearing member representative. However, an advisory committee shall be constituted by the Board, comprising trading members/ clearing members to take benefit of experience of such members."
Broking community slammed the Sebi decision on salaries and banning brokers from the ownership of exchanges.
"We are kept out of the boards, which is not good. The worst part of the decision is that bourses will not have professionals as salary has been capped," said a broker.
While the premier exchange BSE refused to comment, the largest bourse NSE in an official statement said, "It is a welcome and significant development, of considerable importance to the market infrastructure institutions. 

On compensation, Sebi said the compensation structure for key management personnel are to be based on the principles of sound practices issued by international for a like the financial stability board.
"A compensation committee consisting of majority public interest directors and chaired by a PID will determine the compensation of key management personnel. The variable pay component will not exceed one-third of total pay. Of the variable pay 50 percent of it will be paid on a deferred basis after three years," Sebi said,
It added that Esops and other equity-linked options in the MII will not form part of compensation for the identified key management personnel.
The remuneration to key management personnel will be approved by Sebi. Also, the terms and conditions of the remuneration shall not be changed without the approval of Sebi, and that the compensation policy may have 'clawback' arrangements.
To ensure better risk management, Sebi said the management capacity of CCs and the exchanges will be mandated to transfer 25 percent of their profits to the Settlement Guarantee Fund of the CCs where their trades are settled.
In case of depository 25 percent of the profits will be transferred to the Investor Protection Fund of the depositories.
It also allowed depositories to list but not the clearing corporation considering its risk bearing role.
The board also decided the process of de-recognition and exit of stock exchanges.