The Securities and Exchange Board of India (SEBI) is proposing to allow Market Infrastructure Institutions (MIIs) like stock exchanges and depositories to expand into data and technology-related businesses. This move aims to enhance revenue diversification and foster innovation within the financial ecosystem.
Expansion for MIIs
Regulatory Scope
⏳ Time Machine
How today’s news fits into the bigger picture
1992
SEBI Established
The Securities and Exchange Board of India (SEBI) was established as a statutory body to protect investor interests and regulate India's securities market, setting the foundation for market oversight. This marked a significant shift in market governance.
2007
Regulations on MII Governance
SEBI introduced comprehensive regulations specifically for MIIs, focusing on their governance, ownership, and strict separation from commercial activities to prevent conflicts of interest. This established the foundational framework for their operation.
2015-2020
Global Exchanges Diversify
Major global exchanges like LSE and Nasdaq significantly expanded into data, analytics, and technology services, highlighting a global trend toward diversification for MIIs. This provided a blueprint for future growth.
Early 2020s
Call for Indian MII Diversification
Industry stakeholders in India began advocating for greater flexibility for Indian MIIs to innovate and diversify, citing global examples and the need to keep pace with technological advancements. This built momentum for regulatory change.
November 2026
SEBI Proposes MII Business Expansion
SEBI proposes allowing MIIs to enter data and technology businesses, signaling a strategic shift towards modernizing and diversifying revenue streams for exchanges, with safeguards against conflicts. This aims to unlock new growth potential.
Today
SEBI proposes allowing stock exchanges and depositories to expand into data and tech businesses.
What happens next?
SEBI will conduct consultations, and if approved, MIIs will begin exploring new business models in data analytics and technology.
SEBI is considering a significant regulatory change that would permit Market Infrastructure Institutions (MIIs), including stock exchanges and depositories, to venture into new data and technology businesses. This proposal seeks to grant greater flexibility to MIIs, enabling them to diversify their revenue streams and deploy earnings from subsidiaries. While allowing for innovation and growth, the framework will be accompanied by stricter board oversight and robust safeguards to prevent conflicts of interest. The move aligns with global trends where exchanges are increasingly leveraging technology and data.
💭 If you're wondering…
Market Infrastructure Institutions (MIIs) are entities like stock exchanges (e.g., NSE, BSE) and depositories (e.g., NSDL, CDSL) that provide essential services for the smooth functioning of capital markets.
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