英语论文网

orate engaged in providing financial services where not less than seventy-five per cent of the equity capital is held by any of Securities and Exchange Board of India the institutions mentioned in sub-clause (i), (ii), (iii) or (iv) jointly or severally;

(vi) A body corporate constituted or recognized under any law for the time being in force in a foreign country for providing custodial, clearing or settlement services in the securities market and approved by the Central Government;

(vii) An institution engaged in providing financial services established outside India and approved by the Central Government;

The applicant is supposed to be a fit and proper person. [9]

Presently, sponsors are required to hold at least 51% of the equity share capital in the depository, either alone or together. [10] Also, no participant shall at any time, hold more than 5% of the equity capital of the depository [11]

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 5% of the equity share capital in the depository. [12]

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).

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.

The combined holding of all persons resident outside India in the equity share capital of the depository shall not exceed, at any time, 49% of its total equity share capital, subject further to the following: 'the sponsor shall, at all times, hold at least 51% of the equity capital of the depository and the balance of the equity capital of the depository shall be held by its participants.' [13]

At present, the combined holding of all persons residing outside India in the equity share capital of an MII is capped at 49% subject to the following:

The combined holding through FDI [14] and FII [15] routes are capped at 26% and 23%, respectively.

FIIs can acquire the equity shares of an MII only through the secondary market. [16]

An FII cannot have representation on the board of an MII. [17]

After considering the application, if the Board is satisfied that the company established by the sponsor is eligible to act as a depository it may grant a certificate of registration in Form B to the depository subject to the prescribed conditions like registration fee, redressing of grievances etc. A depository is required to make an application to the Board for commencement of business in Form C within one year from the date of issue of certificate of registration.

The SEBI (Depositories and Participants) Regulations, 1996, provides that: 'the depository shall not carry on any activity other than that of a depository unless the activity is incidental to the activity of the depository' [18]

It is provided that a depository may carry out such activity not incidental to its activities as a depository, as may be assigned to the depository, by the Central Government or by a regulator