SEBI has issued a circular dated December 12, 2025 prescribing measures to strengthen governance, oversight and accountability of Market Infrastructure Institutions, namely Stock Exchanges, Clearing Corporations and Depositories mainly in relation to prescribing framework in relation to appointment and reporting structure of Executive Directors of MIIs. The circular follows amendments to the SECC Regulations, 2018 and the Depositories Regulations, 2018 notified on November 21, 2025, which come into force on December 20, 2025.
๐๐๐ฒ ๐ก๐ข๐ ๐ก๐ฅ๐ข๐ ๐ก๐ญ๐ฌ ๐ข๐ง๐๐ฅ๐ฎ๐๐:
๐. ๐๐ฉ๐ฉ๐จ๐ข๐ง๐ญ๐ฆ๐๐ง๐ญ ๐จ๐ ๐๐ฑ๐๐๐ฎ๐ญ๐ข๐ฏ๐ ๐๐ข๐ซ๐๐๐ญ๐จ๐ซ๐ฌ (๐๐๐ฌ): Two Executive Directors are to be appointed for:
(i) Critical Operations (Vertical 1); and
(ii) Regulatory, Compliance, Risk Management and Investor Grievances (Vertical 2). Both EDs shall be members of the Governing Board of the MII.
๐. ๐๐ฉ๐ฉ๐จ๐ข๐ง๐ญ๐ฆ๐๐ง๐ญ ๐ฉ๐ซ๐จ๐๐๐ฌ๐ฌ ๐๐ง๐ ๐๐๐๐ ๐๐ฉ๐ฉ๐ซ๐จ๐ฏ๐๐ฅ: Appointments of EDs must be through open advertisement. At least two names, along with proposed compensation, are to be submitted to SEBI for approval. Any change in compensation terms requires prior SEBI approval.
๐. ๐๐๐ฉ๐จ๐ซ๐ญ๐ข๐ง๐ ๐๐ง๐ ๐จ๐ฏ๐๐ซ๐ฌ๐ข๐ ๐ก๐ญ ๐ฌ๐ญ๐ซ๐ฎ๐๐ญ๐ฎ๐ซ๐: EDs shall report to the Managing Director. In addition, separate quarterly meetings are to be held between EDs and the relevant Board Committees (SCOT, ROC and RMC) without the presence of the MD or other executives. EDs are required to report to the Governing Board on a quarterly basis.
๐. ๐๐๐ฉ๐จ๐ซ๐ญ๐ข๐ง๐ ๐จ๐ ๐ค๐๐ฒ ๐ฆ๐๐ง๐๐ ๐๐ฆ๐๐ง๐ญ ๐ฉ๐๐ซ๐ฌ๐จ๐ง๐ง๐๐ฅ: Heads of Departments and key functionaries, including the CTO, CISO, Compliance Officer and Chief Risk Officer, shall report to the respective EDs instead of the MD, while statutory committees will continue to meet such personnel separately.
๐. ๐๐จ๐ฅ๐ ๐จ๐ ๐ญ๐ก๐ ๐๐ก๐ข๐๐ ๐๐ข๐ฌ๐ค ๐๐๐๐ข๐๐๐ซ: The Chief Risk Officer will handle system and cyber security audits of the MII and will be an invitee to meetings of the Standing Committee on Technology along with the CTO and CISO.
๐ . ๐๐ฉ๐ฉ๐ฅ๐ข๐๐๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐๐ง๐ ๐ ๐ฅ๐ข๐๐ ๐ฉ๐๐ญ๐ก: The first ED is to be appointed within six months and the second ED within nine months from the date of implementation, with provision for limited exemptions to be considered by SEBI on a case-by-case basis.
Copy of the circular is enclosed.
Readers are welcome to share their views with Regstreet Law Advisors on info@regstreetlaw.com