Guidelines to Stock Exchanges, Clearing Corporations and Depositories

SEBI/HO/MRD/POD-3/P/CIR/2024/162 · 2024-11-22 · SEBI

Summary

This section establishes mechanisms to enhance accountability within Market Infrastructure Institutions (MIIs) through mandatory meetings of Public Interest Directors and specific reporting requirements. It mandates quarterly reports from Compliance Officers, half-yearly reports from Chief Risk Officers, and public disclosure of Board meeting agendas and minutes related to regulatory matters. Additionally, it requires MIIs to implement Standard Operating Procedures for disciplinary actions against Key Management Personnel and strengthen their Whistle Blower policies. This section mandates that Market Infrastructure Institutions (MIIs) establish policies for appointing and monitoring back office vendors, including risk assessment and minimum standards. It requires MIIs to provide specific training and familiarization programs for directors and maintain a robust internal policy for the sharing and monitoring of confidential data. Additionally, it outlines a simplified two-stage process for director appointments, defines independent reporting lines for Key Managerial Personnel, and sets the effective date for these provisions.

Text

PIDs of the MII shall meet separately, at least once in every six months, to exchange views on critical issues concerning the MII.

All PIDs shall mandatorily attend such meetings.

The objectives of such meetings shall include reviewing compliance status, functioning of Critical Operations and Regulatory/Compliance Verticals, resource adequacy, conflict of interest issues, and corrective steps taken on SEBI inspection observations.

A report on the outcome of such meetings shall be submitted by the PIDs to SEBI and to the Governing Board of the MII within 30 days of such meeting.

The CO shall submit the quarterly report to SEBI, within 45 days from the end of the quarter.

The CRiO shall submit the half yearly report to SEBI within 90 days from the end of half year.

The MIIs shall disclose on their website the agenda and minutes of its governing board meetings pertaining to regulatory, compliance, risk management and investor grievance areas.

The MIIs may not publicly disclose items which are of strategic/confidential in nature and disclosure of which will put them in a disadvantageous business position, subject to classification as confidential by their governing board.

The relevant agenda and minutes shall be disclosed within 7 working days from the date of approval of such minutes.

All MIIs shall devise internal Standard Operating Procedures (“SOPs”) for undertaking disciplinary actions against KMPs for any non-compliance with regulatory provisions and internal guidelines.

The SOP shall include list of actions that may be initiated against a KMP for breach of any provision, including advisory, warning, impact on annual increment or promotion, invocation of malus-clawback provisions, suspension, termination.

As per the extant regulatory provisions, the disclosure requirements and corporate governance norms as specified for listed companies shall mutatis mutandis apply to all MIIs.

Source: SecMarx — Guidelines to Stock Exchanges, Clearing Corporations and Depositories. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.