Commexes told to make the cap fit on foreign stakes

By the same date, the overall overseas holding in any single exchange must be cut to no more than 49 per cent, it said on Wednesday.

In March, India allowed foreign firms to jointly invest up to 49 percent in its commodity exchanges, of which 26 percent could be through foreign direct investment and 23 percent in the form of portfolio investment. An individual foreign entity can hold a maximum of 5 percent in an exchange. "It has been brought to the notice of the government that some of the existing commodity exchanges had foreign investment above the permitted level," the statement said.

In May, the chief executive of Intercontinental Exchange Holdings Inc said the firm may have to sell part of its 8 percent stake in India’s National Commodity Derivatives Exchange (NCDEX) to other financial institutions to comply with the rules.

India’s booming commodity exchanges have attracted foreign investors looking to diversify their product portfolio and geographical reach.

NYSE Euronext bought a 5 per cent stake in India’s largest commodity bourse, the Multi Commodity Exchange, for $55 million early this year.