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Informist, Monday, May 26, 2025

 

MUMBAI – The Securities and Exchange Board of India Monday directed market infrastructure institutions to strengthen the governance framework for appointment, reappointment, termination, and resignation of key management personnel in crucial operational areas such as compliance, risk management, technology, and information security.

SEBI said in a circular that management officials such as compliance officer, chief risk officer, chief technology officer, and chief information security officer should be of appropriate stature and independence for the market infrastructure institution to deliver on its core public interest mandate of giving primacy to compliance, market integrity, technological resilience, and risk management over commercial considerations.

 

Stock exchanges, clearing corporations, and depositories are currently covered under the market regulator's definition of market infrastructure institutions. The SEBI board, at its meeting Mar. 24, had approved the strengthening of the process of appointment, reappointment, or termination of specific officials as covered in SEBI's circular Monday. The circular gives effect to the SEBI board's decision. It will become effective 90 days from Monday.

 

The governing board of a market infrastructure entity will also have to fix the mechanism for a cooling-off period for the managing director and key management personnel who wish to join a competing market infrastructure entity as managing director or key management personnel, SEBI said in the circular.

 

Stock exchanges, clearing corporations, and depositories will have to engage independent external agencies to identify and recommend suitable candidates for appointment as compliance officers, chief risk officers, chief technology officers, and chief information security officers, as per SEBI's circular. The external agency will submit its recommendations to the nomination and remuneration committee of the market infrastructure entity concerned. The nomination and remuneration committee will evaluate these recommendations, discuss them with the management, and then make its recommendations to the governing board. The final decision will rest with the governing board.  End

 

Reported by Rajesh Gajra

Edited by Rajeev Pai

 

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