Mumbai: The Securities and Exchange Board of India and the ministry of finance want stricter implementation of the demutualisation norms in the exchanges and the major shareholders in the National Stock Exchange may have to reduce their holding in the exchange.

The most important provision in the guidelines notified recently by SEBI is that no investor or entity will be allowed to hold more than 5 per cent in stock exchanges, along with persons acting in concert.

It is reliably learnt that Sebi has asked both the NSE and the Over-the-Counter Exchange of India (OTCEI), set up as demutualised exchanges in the early ''90s, to adhere strictly to the guidelines. Highly placed Sebi sources dealing with the issue also confirmed the move, saying, "Letters in this respect have been sent to both the exchanges."

Life Insurance Corporation of India holds 12.44 per cent, IDBI (10.99 per cent), State Bank of India (10.94 per cent) Stock Holding Corporation of India Ltd (7.11 per cent), ICICI Bank Ltd (6.64 per cent) and Industrial Finance Corporation of India (5.44 per cent) and may be asked to pare their holdings.