Sebi penalises BSE for its subsidiary buying stake in Indus Water without prior approval

Sebi on Friday imposed a penalty of Rs 3 lakh on BSE Ltd for indirectly engaging in works that were unrelated to its activities as a stock exchange without the regulator's approval. The order came after Sebi examined investments made by BSE Ltd to ascertain whether the firm had engaged in activities which were not related to its activity as a stock exchange without approval of Sebi as on March 2021.

The regulator found that BIL, a separate legal entity and a wholly-owned subsidiary of BSE Ltd, had acquired an 8 per cent stake in Indus Water Institute Ltd. The latter provides support to entrepreneurs in water and clean technologies.

In its order, Sebi said that such activities are not related to the activities as carried out by the exchange.


Under the rules, Sebi's prior approval was required for the same.

For the violation of not seeking prior approval, the regulator has imposed a fine of Rs 3 lakh on the exchange.

In October 2020, Sebi imposed Rs 6 crore penalty on NSE for picking up stakes in six entities, including CAMS and Power Exchange India Ltd, without obtaining the regulator's approval.

Apart from CAMS and Power Exchange India Ltd (PXIL), the exchange had acquired stakes in NSEIT Ltd, NSDL E-Governance Infrastructure Ltd (NSEIL), Market Simplified India Ltd (MSIL) and Receivables Exchange of India