The ownership structure of clearing corporations (CCs) in India is set to undergo a significant overhaul, according to a proposal by the Securities and Exchange Board of India (SEBI).

The aim is to establish a more diversified shareholding model, which would involve a departure from the current requirement that stock exchanges hold a majority stake in CCs.

Clearing corporations are responsible for ensuring the settlement of trades in the financial markets, including the verification of fund transfers by buyers and the delivery of securities by sellers. They also maintain a settlement guarantee fund (SGF) to facilitate trade completion in cases where either party fails to meet their obligations.

SEBI's consultation paper, issued on November 22, emphasizes the importance of enhancing the integrity and operational independence of clearing corporations, highlighting that their crucial functions should not be compromised for commercial interests.