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Informist, Friday, Sept. 12, 2025

--SEBI mandates appointment of 2 EDs on board of market infra institutions

NEW DELHI – The board of the Securities and Exchange Board of India, which met Friday, has approved proposals on governance at market infrastructure institutions, according to a press release by SEBI. The market regulator had earlier made these proposals in a consultation paper on Jun. 24.

Going forward, after SEBI issues a circular specifying the new requirements, market infrastructure institutions, which comprise stock exchanges, clearing corporations, and depositories, will need to appoint two executive directors "of appropriate stature and independence" to their respective governing boards. Further, the market infrastructure institution will have to clearly outline roles and responsibilities of the managing director, proposed executive directors, and specific senior executive positions such as the chief technology officer and the chief information security officer of a market infrastructure institution.

The two executive directors who need to be appointed to the governing board will be those heading critical operations vertical, and regulatory, compliance, risk management and investor grievances vertical, SEBI said in the press release. A third proposal, approved by the SEBI board, pertains to establishing clear rules for directorships in other companies of the managing director and proposed executive directors of a market infrastructure institution.

SEBI said the proposals aim to "instil a culture that prioritises regulatory and operational excellence in public interest at both the Governing Board and operations levels of MIIs (market infrastructure institutions)." It said the need for the proposed appointment of two executive directors to the governing board of the market infrastructure institution arose because "there is a significant gap in terms of stature and standing between the MD (managing director) and the KMPs (key management personnel) of" the two verticals of critical operations, and regulatory and risk management.

The ED appointments will also strengthen "the succession planning" within the market infrastructure institutions, SEBI said. It said the process of appointment or removal of the executive directors will be the same as that for the managing director.  End

Reported by Rajesh Gajra

Edited by Deepshikha Bhardwaj

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