Process for appointment, re-appointment, termination or acceptance of resignation of specific KMPs of an MII and Cooling off period for KMPs
Summary
This circular mandates a specific governance process for the appointment, re-appointment, termination, or resignation of Key Management Personnel in compliance, risk, technology, and security roles at Market Infrastructure Institutions. It introduces a requirement for MIIs to prescribe cooling-off periods for KMPs joining competing institutions and establishes transparency rules regarding the non-re-appointment of Public Interest Directors. The provisions apply from the 90th day following the circular's issuance.
Text
The MII shall engage an independent external agency to identify and recommend suitable candidates for CO, CRiO, CTO and CISO; the NRC evaluates these recommendations and submits them to the Governing Board, which takes the final decision.
The NRC evaluates cases and submits recommendations to the Governing Board for final decision on re-appointment, termination or acceptance of resignation of CO, CRiO, CTO and CISO, provided no such KMP is terminated without a reasonable opportunity of being heard.
The above provisions will be applicable to all appointments, re-appointments, terminations or acceptance of resignations on or after the date of implementation of this circular.
The appointment, re-appointment, termination or acceptance of resignation of KMPs other than the MD, CO, CRiO, CTO and CISO shall continue to be with the NRC of the MII.
The cooling-off period for Non-Independent Directors and PIDs joining another MII shall be as prescribed by the Governing Board of the MII, modifying existing one-year requirements under SECC Regulations, 2018 and D&P Regulations, 2018.
The Governing Board of an MII shall prescribe the mechanism for a cooling-off period for KMPs (including the MD) of the MII joining a competing MII as a KMP.
In case the existing PID after completion of his first term is not considered for re-appointment by the Governing Board of the MII, the rationale for the same shall be recorded and informed to SEBI.
The provisions of the circular shall be applicable from the 90th day of issuance of the circular.
All MIIs are advised to take necessary steps for implementation, make necessary amendments to relevant byelaws, rules and regulations, and bring the provisions to the notice of market participants and disseminate the same on their website.
This circular is issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India Act 1992 read with regulation 51 of the SECC Regulations, 2018, section 26(3) of the Depositories Act, 1996 and regulation 97 of D&P Regulations, 2018.
Source: SecMarx — Process for appointment, re-appointment, termination or acceptance of resignation of specific KMPs of an MII and Cooling off period for KMPs. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.