Sebi Reviews Appointment Process, Cooling-Off Period for MII Officials

Mumbai, Mar 24 (PTI) Markets regulator Sebi's board on Monday reviewed the norms for appointing specific key officials of stock exchanges and other market institutions, along with a cooling-off period before they can join a competing institution.

These measures are aimed at ensuring that MIIs (market infrastructure institutions) are staffed with qualified, independent key management personnel (KMPs) and directors while safeguarding market integrity through effective cooling-off policies.

Sebi also reviewed the process for appointing Public Interest Directors (PIDs) on the governing board of MIIs, following feedback from various stakeholders regarding the lack of shareholder approval for such appointments.

"In order to have uniformity in the cooling-off period for PIDs and KMPs of an MII joining another MII, the existing provisions on cooling-off period were reviewed," Sebi chairman Tuhin Kanta Pandey addressed reporters after the board meeting.

This led to a re-examination of the existing provisions, with a particular focus on strengthening governance within MIIs.

The process for appointing key KMPs, such as the Compliance Officer, Chief Risk Officer, Chief Technology Officer, and Chief Information Security Officer, was also reassessed to ensure alignment with the core public interest mandate of technological resilience, market integrity, and compliance.

Moreover, Pandey clarified that the existing process for the appointment of PIDs, which requires Sebi approval but not shareholder approval, would remain in place. If an MII's governing board decides not to re-appoint an existing PID after their first term, the rationale for this decision must be communicated to Sebi.

Besides, Pandey said that Sebi's board accorded approval to defer the implementation of the amendments to the regulations governing merchant bankers, debenture trustees and custodians as approved at its last board meeting held in December 2024.

The revised proposals would be considered by the board at its forthcoming meeting after internal review and evaluation of alternative approaches instead of requiring hiving-off as originally approved and with an aim of ensuring a level playing field, he added.

In its last meeting, headed by Pandey's predecessor Madhabi Puri Buch in December, the Sebi board had accorded approval for merchant bankers, debenture trustees and custodians to carry out other regulated activities as a separate legal entity after obtaining registration from the respective regulatory authority within a period of two years from the date of notification of amended regulations.