CHAPTER IV GENERAL OBLIGATIONS OF A RECOGNISED STOCK EXCHANGE AND A RECOGNISED CLEARING CORPORATION 28. (1) A recognised stock exchange shall use the services of a recognised clearing corporation for clearing and settlement of its trades in accordance with an agreement between them. (2) A recognised stock exchange shall extend its arbitration mechanism for settlement of disputes or claims arising out of clearing and settlement of trades executed on such stock exchange. ==========... ... ...

27. A recognised market infrastructure institution shall adopt an appropriate policy to segregate its regulatory departments from other departments. =============... ... ...

26. A recognised market infrastructure institution shall constitute such committees as may be specified by the Authority from time to time. =============... ... ...

25. (1) Every director and key management personnel of a recognised market infrastructure institution shall abide by such Code of Ethics and Code of Conduct as may be specified by the Authority. (2) The Authority may, for any failure by the directors or key management personnel to abide by these regulations or Code of Ethics and conduct or in case of any conflict of interest, either upon a reference from the recognised market infrastructure institution or suo motu, take appropriate action... ... ...

CHAPTER III GOVERNANCE OF MARKET INFRASTRUCTURE INSTITUTIONS 24. (1) A recognised market infrastructure institution shall adopt the broader principles of governance prescribed under the Principles for Financial Market Infrastructures by Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) and such other governance norms as may be specified by the Authority, from time to time. (2) The governing board of a recognised ... ... ...

23. (1) A recognised market infrastructure institution shall ensure that all its directors, key management personnel and shareholders are fit and proper persons, at all times: Provided that, in respect of a listed recognised market infrastructure institution, the onus to ensure fit and proper person for shareholders shall be on: (a) the acquirer in respect of shareholding less than 5 per cent. in the recognised market infrastructure institution; and (b) the acquirer and ... ... ...

22. A recognised market infrastructure institution may apply for listing of its securities on any stock exchange pursuant to approval of the Authority. =============... ... ...

21. A recognised market infrastructure institution shall disclose to the Authority their shareholding pattern on a quarterly basis within fifteen days from the end of each quarter, including therein the following, - (a) the names of the ten largest shareholders along with the number and per cent. of shares held by them; and (b) the names of the shareholders who had acquired shares in that quarter. =============... ... ...

20. A recognised market infrastructure institution shall put in place an adequate monitoring mechanism to ensure compliance with the shareholding conditions specified in these regulations, at all times. =============... ... ...

19. (1) Any person who acquires equity shares or voting rights, in a recognised market infrastructure institution, directly or indirectly, either individually or together with persons acting in concert, of ten per cent. or more of the paid-up equity share capital shall not have any conflict of interest and obtain prior approval of the Authority. (2) The market infrastructure institution shall verify the declarations/undertakings in relation to compliance with fit and proper requirements given... ... ...

18. (1) The shareholding in a recognised depository shall be held by, - (a) a depository recognised in India or a Foreign Jurisdiction with a minimum of twenty-six per cent. of the paid-up equity share capital of the recognised depository; or (b) a consortium of market infrastructure institutions with a minimum of fifty-one per cent. of the paid-up equity share capital of the recognised depository held by such consortium: Provided that the stock exchange(s) recognised ... ... ...

Shareholding in a recognised clearing corporation must be anchored by eligible market infrastructure institutions. A recognised stock exchange or clearing corporation must hold at least twenty-six per cent of paid-up equity capital, or an eligible consortium must hold at least fifty-one per cent, with recognised stock exchanges holding a majority within the consortium. Other persons may not directly or indirectly, alone or with persons acting in concert, acquire or hold more than twenty-five per cent of paid-up equity capital.

Regulation 16 requires a recognised stock exchange to have prescribed ownership by a recognised stock exchange or a consortium of eligible market infrastructure institutions. A consortium must hold at least 51% of paid-up equity share capital, with recognised stock exchanges collectively holding at least 51% within the consortium. Other persons, individually or acting in concert, cannot directly or indirectly acquire or hold more than 25% of paid-up equity share capital.

Recognised market infrastructure institutions must annually submit to the Authority a statutory auditor's certificate verifying their net worth for the preceding financial year. The audited net worth certificate is due by 30 September each year.

Recognised market infrastructure institutions must maintain a minimum net worth of USD 3 million at all times. The Authority may prescribe a higher net-worth requirement as a risk-management measure, having regard to the nature and scale of the institution's business.

13. The recognition granted to a market infrastructure institution may be withdrawn by the Authority after giving a reasonable opportunity of being heard: Provided that the recognition granted to a stock exchange or a clearing corporation shall be withdrawn in the manner provided under section 5 of the SCRA. =============... ... ...

12. The provisions of these regulations, as applicable to the grant of recognition shall also apply in relation to an application for renewal of recognition of a market infrastructure institution. =============... ... ...

11. A recognised market infrastructure institution shall pay the regulatory fee as specified by the Authority from time to time. =============... ... ...

10. The period of recognition granted to a market infrastructure institution shall be permanent or for such period not less than one year as may be specified by the Authority. =============... ... ...

9. (1) The Authority may, after considering the application and on being satisfied that the applicant has complied with the conditions laid down in these regulations and is eligible to act as a stock exchange, a clearing corporation, or a depository, as the case may be, grant recognition to the applicant subject to such conditions as the Authority may deem fit; (2) A recognised market infrastructure institution shall comply with such additional conditions as may be imposed by the Authorit... ... ...