Sebi amends rules to strengthen structure, management of exchanges, clearing organization | Jobs Vox


To strengthen the governance of stock exchanges, corporations and depositories, the Securities and Exchange Board of India (SEBI) has undertaken major reforms in the structure, governance and accountability processes of these institutions.

According to SEBI, these regulatory changes are expected to bring greater transparency and accountability in the functioning of institutions.

The move to strengthen and streamline the rules comes amid corporate governance charges against members of India’s largest stock exchange, the National Stock Exchange, including former MD and CEO Chitra Ramakrishna.

The amendment will come into effect within 180 days from the date of its publication in the official gazette, SEBI said. The decision was taken in today’s meeting of the Supervisory Board.

The functions of market infrastructure institutions are divided into 3, which are critical functions – control, compliance and risk management and other functions, including business development.

MIIS gives higher priority to asset allocation to activities in the first two verticals than assets to the third vertical, SEBI said in a statement.

As part of the Board Governance Regulations, MIIS mandates the appointment of public interest directors with expertise in technology, law and regulation, finance and accounting and capital markets. “Internal review of the functioning of MIIs and their legal committees is done every year. In addition, external review is done every three years by an independent body,” he said.

In addition, the appointment and dismissal of the main managers is done by the selection and remuneration committee.

Appoints a separate Chief Risk Officer responsible for handling risks associated with MII. The performance of management staff is evaluated once every six months.

On data sharing, MIIS said there is a need to formulate an internal policy for data sharing and tracking that includes the method and manner of data sharing, the types of data that can be shared, and a data sharing escalation matrix.

Among other decisions, SEBI has introduced a framework to facilitate execution-only platforms for direct schemes of mutual fund schemes.

The regulator is introducing a platform to reduce risk to investors in case of disruption of business services at the broker’s end.

SEBI has strengthened the framework for stock brokers designated as qualified stock brokers who must adhere to enhanced risk management practices to protect investors from any risk.

Widespread negative impact.

In other decisions, SEBI has introduced governance norms for REITs and mutuals that are similar to corporate governance norms for listed companies.

Alternative investment funds

To provide alternative investment fund managers with greater investment flexibility and improve participation in the domestic corporate bond market, SEBI has allowed AIFs to participate in Credit Default Swaps (CDS), not only as protection buyers but also as protection sellers, subject to risk conditions. Reduction.

(Disclaimer: The advice, suggestions, opinions and views given by the experts are their own. These do not represent the views of The Economic Times)


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