Guidelines to stock exchanges, clearing corp and depositories
Guidelines to Stock Exchanges, Clearing Corporations and Depositories
Based on the recommendations of the Committee on Strengthening of Governance of Market Infrastructure Institutions (MIIs) i.e. Stock Exchanges, Clearing Corporations and Depositories and subsequent deliberations in the Industry Standards Forum (ISF) of MIIs on certain issues, the following guidelines are provided toMIIs:
- Mechanism to enhance Accountability
1.1. Meetings of Public Interest Directors and their reporting
1.1.1.As per the Code of Conduct for Public Interest Directors (PIDs) specified under Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 (hereinafter referred as “SECC Regulations, 2018”) and Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 (hereinafter referred as “D&P Regulations, 2018”), PIDs of the MII shall meet separately, at least once in every six months, to exchange views on critical issues concerning the MII.
1.1.2. All PIDs shall mandatorily attend such meetings.
1.1.3. The objectives of such meetings shall, inter alia, include the following:
1.1.3.1. To review the status of compliance with all applicable regulations, circulars, guidelines, letters issued by SEBI from time to time;
1.1.3.2.To review the functioning of Vertical-1 i.e.“Critical Operations”and Vertical-2 i.e. “Regulatory, Compliance, Risk Management and Investor Grievances”;
1.1.3.3. To review the adequacy of resources (both financial and human) for functions under Verticals 1 and 2;
1.1.3.4. To identify important issues which may involve conflict of interest for the MII or may have significant impact on the functioning of the MII or may not be in the interest of securities market; and
1.1.3.5. To review the corrective steps taken by the MII on observations of SEBI inspections particularly on issues of governance standards, technology, cyber security, system audit and cyber security audit observations.
1.1.4. In order to achieve the above objectives, PIDs may discuss with the concerned Vertical Heads or Key Management Personnel (KMPs) or any other personnel, as may be felt appropriate by the PIDs.
1.1.5. PIDs as member of various committees (including statutory committees) shall provide a report to other PIDs on the working of their committees.
1.1.6. A report on the outcome of such meetings shall be submitted by the PIDs to SEBI and to the Governing Board of the MIIwithin 30 days of such meeting.
1.1.7. Accordingly, paragraph 2.2.3.4 of Chapter 6 of Master Circular for “Stock Exchanges and Clearing Corporations” dated October 16, 2023, paragraph 4.66.2.4 of Section 4 of Master Circular for “Depositories” dated October 06, 2023 and paragraph 15.3.3 (IV) of Chapter 15 for Master Circular dated August 04, 2023 for “Commodity Derivatives Segment” will stand rescinded with effect from the date of implementation of this circular.
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