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.
𝐊𝐞𝐲 𝐡𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 𝐢𝐧𝐜𝐥𝐮𝐝𝐞:
𝐀. 𝐀𝐩𝐩𝐨𝐢𝐧𝐭𝐦𝐞𝐧𝐭 𝐨𝐟 𝐄𝐱𝐞𝐜𝐮𝐭𝐢𝐯𝐞 𝐃𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬 (𝐄𝐃𝐬): 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.
𝐁. 𝐀𝐩𝐩𝐨𝐢𝐧𝐭𝐦𝐞𝐧𝐭 𝐩𝐫𝐨𝐜𝐞𝐬𝐬 𝐚𝐧𝐝 𝐒𝐄𝐁𝐈 𝐚𝐩𝐩𝐫𝐨𝐯𝐚𝐥: 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.
𝐂. 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐚𝐧𝐝 𝐨𝐯𝐞𝐫𝐬𝐢𝐠𝐡𝐭 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞: 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.
𝐃. 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐨𝐟 𝐤𝐞𝐲 𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐩𝐞𝐫𝐬𝐨𝐧𝐧𝐞𝐥: 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.
𝐄. 𝐑𝐨𝐥𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐂𝐡𝐢𝐞𝐟 𝐑𝐢𝐬𝐤 𝐎𝐟𝐟𝐢𝐜𝐞𝐫: 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.
𝐅. 𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐚𝐧𝐝 𝐠𝐥𝐢𝐝𝐞 𝐩𝐚𝐭𝐡: 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.
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