SEBI Amends Stock Exchange and Clearing Corporation Regulations, 2025 [Read Notification]

The Securities and Exchange Board of India ( SEBI ) issued Notification No. SEBI/LAD-NRO/GN/2025/246 dated April 30, 2025, announcing Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Third Amendment) Regulations, 2025. The amendment modifies key provisions of Regulation 24 of the principal 2018 framework to enforce stricter norms regarding the movement and reappointment of directors across these entities.

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Key Highlights of the Amendment

Director Appointments Subject to Cooling-Off Period

The amended regulation now mandates that:

• A non-independent director of a recognized stock exchange or clearing corporation may be appointed to a similar role in another recognized stock exchange, clearing corporation, or depository only after a “cooling-off” period.
  
  
• This appointment is subject to prior approval from SEBI and the cooling-off period must be determined by the governing board of the outgoing institution.

This measure ensures that directors do not carry over confidential insights or influence from one regulated entity to a potential competitor without an appropriate buffer period.

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New Rules for Public Interest Directors (PIDs)

The amendment also addresses the reappointment of Public Interest Directors (PIDs):

• After completing their term at one recognized entity, a PID may be reappointed to another entity for one more term of three years, subject again to SEBI’s prior approval and a cooling-off period.
  
  
• This cooling-off requirement applies only if the new appointment is to a competing institution (e.g., between two exchanges or two clearing corporations).

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Clarifications and Definitions Introduced

To provide greater clarity, SEBI has introduced two important explanations:

1. Competing Institutions Defined: A PID moving between recognized stock exchanges or between clearing corporations is considered to be shifting to a competing institution, thus triggering the cooling-off clause.
   
   
2. Subsidiary Entities Considered as One: If a clearing corporation is a subsidiary of a stock exchange, both will be treated as a single entity. Transfers within such groups will not require a cooling-off period.
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Implementation Timeline

The new regulatory provisions will come into effect 90 days from the date of publication in the Gazette, i.e., from July 29, 2025.

To Read the full text of the Notification CLICK HERE

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Notification No: SEBI/LAD-NRO/GN/2025/246 , 30 April 2025