Role of the Independent Oversight Committee for Product Design
Summary
This circular mandates commodity derivatives exchanges and IFSC stock exchanges to constitute an Independent Oversight Committee for Product Design. It defines the committee's specific functions, including overseeing new product introductions, reviewing existing contracts, and monitoring inspection observations. The provisions apply uniformly to all relevant exchanges and require immediate compliance through bye-law amendments.
Text
In order to bring uniformity with respect to the role of the oversight committee on product design... it is decided that the functions of the oversight committee for ‘Product Design’ in all the commodity exchanges shall be as under-
To oversee matters related to product design such as introduction of new products/contracts, modifications of existing product/contract designs etc. and review the design of the already approved and running contracts.
To oversee SEBI inspection observation on Product Design related issues.
To estimate the adequacy of resources dedicated to Product design related function.
The head(s) of department(s) handling the above matters shall report directly to the committee and also to the Managing Director. Any action of the Exchange against the aforesaid head(s) shall be subject to an appeal to the committee, within such period as may be determined by the governing board.
The recognized stock exchanges operating in the IFSC shall also be required to constitute an oversight committee for product design and discharge their functions enumerated at para ‘2’ and ‘3’ above.
The provisions of this circular shall come into effect from the 30 days from the date of the circular.
The Exchanges are advised to: i. take steps to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the same. ii. bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website.
This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Role of the Independent Oversight Committee for Product Design. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.