The Bimal Jalan committee's suggestions on the working and ownership norms of market infrastructure institutions (MIIs), including stock exchanges, are ‘regressive', The Associated Chambers of Commerce and Industry of India (Assocham) on Monday said after a round table conference organised by it here to discuss the report.

“The majority of the participants expressed deep anguish that the recommendations are regressive and against the current expectations of more competition and corporate governance in MIIs,” it said in an official release.

The committee, which was appointed by the capital market regulator SEBI, had last month recommended not allowing listing by stock exchanges, putting a cap on their profits and fixing their executive remunerations, as part of its suggestions.

“The Bimal Jalan committee report has failed to find market favour in respect of non-listing of market infrastructure institutions (MIIs), capping of profits and fixing of (their) executive remunerations... ”

“The market needs more competition and better regulation rather than less competition and outsourced regulation,” Assocham said.

In its recommendations submitted in November, the committee suggested that SEBI should oversee the profits made by stock exchanges and recommended a diversified shareholding structure for bourses.

However, the committee favoured allowing anchor investors up to a total of 49 per cent shares in bourses, with one investor owning a maximum of 24 per cent stake. However, every anchor investor would need to bring down its stake to 15 per cent in ten years from the time of becoming an anchor.

Large number of investors, both domestic as well as foreign, have invested in these institutions and would be looking for an exit route on listing. Such a move (Jalan committee's suggestion on not allowing listing) will undermine the Indian growth story and give adverse signals,” Assocham said.

“The participants had consensus that there should not be any cap on the number of stock exchanges and competition will drive the growth of industry where the economy is set to develop if more exchanges are brought to the foray and will lead to more competition,” Assocham said. The participants at the round table also expressed unhappiness over any attempts to put a cap on profits.

“...world over profit alone drives investments and funds for innovation and technology. It will drive the market and business to be more profit oriented; it will bring technology innovations, corporate governance and more participants,” it said.

Assocham added that majority of the participants were of the opinion that MII executives' remuneration should not be subject to cap but be linked to profit.

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