ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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On the Jalan Committee Report

The recommendations of the Jalan Committee on the governance of stock exchanges have evoked a storm of protests, especially from sections of those involved in trading securities. This is not surprising, for the overarching stance of the committee is that exchanges are in the nature of "public institutions" with significant externalities for the economies they serve. This is because they have a dual purpose of providing trading services as well as carrying out regulatory functions of monitoring traders and listed companies. Thus they approximate in nature an "essential facility".

tioned. NSE also happens to be a notfor-prot organisation. Some media reports have recently questioned high salaries Rajesh Chakrabarti of the top brass of NSE as being out of T he recently published draft recommendations of the Report of the Committee on Review of Ownership and Governance of Market Infrastructure Institutions, better known as the Jalan Committee report, after chairperson, former Reserve Bank of India governor Bimal Jalan (SEBI 2010), have created a stir in the nancial media, with some segments vehemently opposing the r eport. In this article we will try to understand the key recommendations of the committee and provide a brief overview of the debate surrounding them. It is perhaps instructive to rst look at the background of the report, summarise its main recommendations followed by a discussion of the rationale and counterarguments of these recommendations.

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