What are MIIs?
MIIs are institutions that provide the infrastructure for trading, clearing, settlement, and record-keeping of securities.They include:
Stock Exchanges: These are platforms where investors can buy and sell securities like stocks, bonds, and derivatives. They facilitate price discovery and ensure fair and orderly trading.
Clearing Corporations: These institutions act as intermediaries between buyers and sellers, ensuring that trades are settled properly. They manage the financial risks involved in transactions by guaranteeing the completion of trades.
Depositories: These institutions hold and manage securities in electronic form. They act as a safe and secure custodian of investors' holdings, eliminating the need for physical certificates.
Committees formed regarding MIIs: -
R. Gandhi Committee, had noted while most clearing corporations in India were 100% owned by a single exchange, given such corporations are riskbearing MIIs, it is highly desirable they should be widely held.
SEBI has recently formed an ad-hoc committee under Usha Thorat to review the ownership and economic structure of clearing corporations and suggest measures to ensure the corporations function as resilient, independent and neutral risk managers.
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