SEBI Proposes New Measures to Strengthen Stock Exchange Governance
The Securities and Exchange Board of India (SEBI) has proposed new measures to strengthen the governance of stock exchanges in the country. The move is aimed at enhancing the functioning of market infrastructure institutions (MIIs) and ensuring that they operate in a transparent and fair manner. The proposal includes the appointment of two officers by MIIs to head functions related to trading, risk, and compliance.
The move comes after SEBI increased the number of senior positions at MIIs last month. Currently, only the Managing Director (MD) is required to be part of the MII’s board. The proposal seeks to bring in more expertise and experience to the MIIs, which are responsible for ensuring that the stock market operates smoothly and efficiently.
According to the proposal, the two officers will be appointed as Chief Compliance Officer (CCO) and Chief Risk Officer (CRO). The CCO will be responsible for ensuring that MIIs comply with regulatory requirements and maintain high standards of governance. The CRO will be responsible for identifying, assessing, and mitigating risks associated with the operations of MIIs.
The proposal also seeks to limit the powers of stock exchange chiefs, who have been accused of exerting undue influence over market operations. The move is aimed at preventing conflicts of interest and ensuring that market operations are not influenced by personal interests.
The proposal has been welcomed by market participants, who have long been critical of the lack of transparency and accountability in the functioning of MIIs. The move is seen as a step towards enhancing the credibility and integrity of the stock market.
“The proposal is a positive step towards strengthening the governance of MIIs,” said a market expert. “It will help to ensure that MIIs operate in a transparent and fair manner, and that conflicts of interest are minimized.”
The proposal is also seen as a step towards implementing the recommendations of the B. Gopinath Committee, which was set up by SEBI to review the governance of MIIs. The committee had recommended that MIIs have a more structured governance framework, and that the powers of the MD be limited.
The proposal is now open for public comments, and SEBI is expected to take a final decision on the matter soon. The move is expected to have a significant impact on the functioning of MIIs, and is likely to enhance the credibility and integrity of the stock market.
The proposal is part of SEBI’s efforts to strengthen the governance of the stock market, which has been plagued by several controversies in recent years. The regulator has taken several measures to address these concerns, including increasing the number of senior positions at MIIs and enhancing the transparency of market operations.
In conclusion, the proposal by SEBI to strengthen the governance of stock exchanges is a significant step towards enhancing the credibility and integrity of the stock market. The appointment of two officers to head functions related to trading, risk, and compliance is likely to bring in more expertise and experience to MIIs, and will help to ensure that they operate in a transparent and fair manner.
