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Sebi proposes easing director rules for India’s market infrastructure firms
The consultation would also introduce standardized qualification and responsibility requirements for key technology, cybersecurity, compliance and risk roles at stock exchanges and clearing corporations.
India’s market regulator, the Securities and Exchange Board of India, has proposed changes to the governance framework for market infrastructure institutions, including stock exchanges and clearing corporations, aimed at expanding the pool of eligible board candidates.
In its consultation paper, Sebi said MIIs face difficulties appointing public interest directors because current regulations bar certain industry participants from serving on governing boards. It also highlighted a rule gap where individuals could be disqualified as directors simply because a separate subsidiary within the same parent group operates as a trading member, clearing member, or depository participant.
Sebi also proposed expanding an existing exemption related to diversified ownership. Under the suggested definition, diversification would mean no shareholder, excluding public-sector entities, holds 10.0% or more of equity or voting rights individually or with persons acting in concert, or exercises management control.
Separately, Sebi outlined a second proposal focused on key managerial personnel. It would require MIIs to set standardized roles and responsibilities for positions including chief technology officer, chief information security officer, compliance officer and chief risk officer, using standard operating procedures based on inputs from relevant statutory committees.