SEBI proposes automatic approval for related activities by stock exchanges and depositories, subject to financial caps and governance norms.
Automatic Route Proposed for MII-Related Activities
SEBI has proposed an automatic approval mechanism for stock exchanges and depositories engaging in activities related to their regulated functions, subject to prescribed financial thresholds and governance safeguards. The move aims to expedite operational flexibility while ensuring conflict avoidance and transparency.
Entities will be permitted to undertake specified related-party or ancillary business activities without prior SEBI approval if they meet criteria on capital allocation, board oversight, and disclosure. Any activity exceeding financial limits or falling outside the notified list will require specific clearance.
This policy shift encourages innovation and diversification within market infrastructure institutions. Legal practitioners should assess client activities against the proposed thresholds and prepare governance documentation to qualify under the automatic route.