SEBI Issues New Framework for Appointment, Cooling-Off Period, and Reappointment of Key Personnel in Market Infrastructure Institutions [Read Circular]
SEBI issued new governance norms for KMP appointments, cooling-off periods, and PID reappointments in Market Infrastructure Institutions
SEBI – SEBI Issues New Framework for Appointment – New Framework for Appointment – taxscan
SEBI – SEBI Issues New Framework for Appointment – New Framework for Appointment – taxscan
The Securities and Exchange Board of India (SEBI) issued a Circular dated May 26, 2025, announcing a comprehensive framework governing the appointment, re-appointment, termination, and resignation of specific Key Management Personnel (KMPs) of Market Infrastructure Institutions (MIIs), including stock exchanges, clearing corporations, and depositories.
The circular also introduces updated norms for the cooling-off period for KMPs moving to competing MIIs and sets a new disclosure requirement for the non-reappointment of Public Interest Directors (PIDs).
Key Highlights:
Appointment and Removal of KMPs
SEBI mandates that appointments of senior personnel such as the Chief Compliance Officer (CO), Chief Risk Officer (CRiO), Chief Technology Officer (CTO), and Chief Information Security Officer (CISO) must be made through an independent external agency, with final approval from the Governing Board of the MII. Termination or resignation also requires board-level involvement, and no KMP may be dismissed without a fair hearing.
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Cooling-Off Period for KMPs
The cooling-off period for KMPs, including Managing Directors, shifting to a competing MII will now be determined by the respective Governing Board of the MII. This marks a shift from the earlier fixed one-year requirement under SECC and D&P regulations.
Public Interest Directors (PIDs)
In cases where a PID is not re-appointed after completing their first term, MIIs must record the reason and inform SEBI, adding transparency to the governance process.
Effective Date and Compliance
The circular's provisions will come into force 90 days from the date of issuance, i.e., from August 24, 2025. MIIs have been instructed to amend their internal rules, inform market participants, and publish the circular on their official websites.
This circular, issued under the powers granted by the SEBI Act, 1992, and related regulations, aims to strengthen oversight, promote transparency, and uphold the public interest role of MIIs in the securities market.
To Read the full text of the Circular CLICK HERE
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