To facilitate floating of large public issues, BSE wanted the restriction of keeping at least 25 per cent equity in a company among the general investors removed and replaced by a minimum offering of 2.5 lakh shares in case of issues worth over Rs 10 crore.

Currently, under the SEBI rules, a company has to offer a minimum of 25 per cent of the paid-up capital to the public at the time of a domestic offering of shares.

"We met finance minister Yashwant Sinha and finance secretary Vijay Kelkar and gave suggestions for a strong capital market and better investor returns," Rathi said a day after his meeting.

On his proposal for foreign companies to divest 24 per cent, Rathi said this would notin any way come in the way of the companies operating in India as the majority stake would be held by the foreign firms.

The BSE president also proposed that financial institutions be allowed to invest at least two per cent of their investible resources in equity markets while banks should be given the freedom to invest one per cent of their deposits in stocks.

Rathi said General Insurance Corporation (GIC) should be allowed to invest 30-50 per cent of their funds for the capital markets and Life Insurance Corporation should earmark 15 per cent of investible funds for the same.

"Both LIC and GIC have investible funds for long-term and they can invest more money into the capital market compared to banks and FIs," he said

Currently, GIC's investments in the capital markets stands at only 15 per cent while LIC at five per cent of total investible funds.