SEBI prescribes appointment process for MII officials

The norms, applicable after 3 months, are for the appointment, re-appointment, termination or resignation of KMPs such as the Compliance Officer, Chief Risk Officer, Chief Technology Officer and Chief Information Security Officer
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The Securities and Exchange Board of India (SEBI) on Monday has prescribed the process for appointment of key managerial personnels (KMPs) and public interest directors on the governing board of market infrastructure institutions (MIIs).

“To strengthen the governance framework of stock exchanges, clearing corporations and depositories (collectively referred to as MIIs), it is required that the KMPs of MIIs in the crucial areas of operations, such as compliance, risk management, technology and information security are of appropriate stature and independence,” SEBI said in a circular.

The norms, applicable after 3 months, are for the appointment, re-appointment, termination or resignation of KMPs such as the Compliance Officer, Chief Risk Officer, Chief Technology Officer and Chief Information Security Officer.

An external agency will identify suitable candidates for the roles, which will be reviewed and recommended by the Nomination and Remuneration Committee (NRC) to the governing board of MIIs. The governing board will make the final decision regarding appointments, re-appointments, terminations, and resignations.

“While the Governing Board of the MII sets the overall tone, a culture of prioritising efficient discharge of responsibilities towards public interest falling under Verticals 1 and 2, over commercial interest under Vertical 3 must be ingrained at the operating level as well.” SEBI said.

In case an existing PID is not considered for re-appointment by the governing board after completing the first term, the rationale has to be recorded and informed to the regulator.

The regulator has also removed the requirement of a one-year cooling-period for PIDs and non independent directors before joining another MII. The cooling off-period will be decided by the governing board of the MII. This rule will apply 90 days after the gazette notification.

Published on May 26, 2025