Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2008

NOTIFICATION NO. 11/LC/GN/2008/20494, DATED 17-3-2008

In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations to further amend the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, namely :—

1. These Regulations may be called the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2008.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, in regulation 7,

(i) or clause (d), the following clause shall be substituted, namely :—

“(d) the sponsor shall, at all times, hold at least fifty-one per cent of the equity share capital of the depository;”

(ii) in clause (e), the proviso and the Explanation shall be omitted ;

(iii) after clause (e), the following clauses and Explanation shall be inserted, namely :—

(ea) no person other than a sponsor, whether resident in India or not, shall at any time, either individually or together with persons acting in concert, hold more than five per cent of the equity share capital in the depository ;

Explanation: For the purposes of this clause,

(i) the expression "person resident in India" shall have the meaning assigned to it in clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999) ;

(ii) the expression "persons acting in concert" shall have the meaning derived from clause (e) of sub-regulation (1) of Regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ;

(eb) the combined holding of all persons resident outside India in the equity share capital of the depository shall not exceed, at any time, forty-nine per cent of its total equity share capital, subject further to the following :

(i) the combined holdings of such persons acquired through the foreign direct investment route is not more than twenty six per cent of the total equity share capital, at anytime ;

(ii) the combined holdings of foreign institutional investors is not more than twenty three per cent of the total equity share capital, at any time ;

(iii) no foreign institutional investor acquires shares of the depository otherwise than through the secondary market ;

(ec) no foreign institutional investor shall have any representation in the Board of Directors of the depository;”