A panel set up by SEBI wants Market Infrastructure Institutions (MIIs) such as exchanges, clearing houses and depositories to revamp their compliance and risk management structures to minimize governance lapses.
- The recommendations comes as CBI is probing the the National Stock Exchange — for governance lapse.
Key points
- A committee headed by G. Mahalingam recommended market infrastructure institutions (MII) should separate functions into three broad categories; critical operations; regulatory, compliance and risk management; and other functions such as business development.
Some of the other recommendations are below:
- At least two-third members of the board at the MIIs shall comprise of public interest directors to ensure greater independence.
- The role of the board of the MII and the senior management team should be clearly outlined through a set of guiding principles, especially focused on regulatory, compliance, risk and conduct related aspects.
- In order to enhance transparency, the MIIs should disclose the agenda and minutes of meetings of their board, keeping in mind their role as a ‘first-level regulator’.
What are Market Infrastructure Institutions (MIIs)?
- Stock exchanges, depositories and clearing houses are all Market Infrastructure Institutions and constitute a key part of the nation’s vital economic infrastructure.
