Capital markets regulator Sebi has suggested that banks and financial institutions from public sector be considered as ‘public shareholders’ in stock exchanges, but the view has been rejected by Finance Ministry.

The issue is likely to be discussed on Thursday at a meeting of Sebi’s board, which would also be apprised of the impact of the Finance Ministry’s decision for not agreeing to such a proposal from the capital markets regulator, sources said.

If the current stalemate continues, three national stock exchanges – MCX-SX, United Stock Exchange and BSE -- would have to increase their public shareholding by 25.66 per cent, 1.72 per cent and 0.845 per cent respectively by April 2015.

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