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Committees at Market Infrastructure Institutions (MIIs)
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.... 2018], were notified on October 3, 2018 and the SECC Regulations, 2012 and SEBI (D&P) Regulations, 1996 were repealed. 3. Given that the scope of work of some of the committees at MIIs were inter-related and overlapping, SEBI Board, in its meeting dated June 21, 2018, inter alia decided to rationalize the constitution of existing regulatory committees at MIIs. 4. Accordingly, in respect of statutory committees at MIIs, the Regulation 29 of SECC Regulations, 2018 & Regulation 30 of SEBI (D&P) Regulations, 2018, reads as under: (1) Every recognised stock exchange / recognized clearing corporation or depositories [as applicable], shall constitute the committees as per sub-regulation (2) and sub-regulation (3). (2) Functional committee, comprising: a. Member selection committee; b. Investor grievance redressal committee; and c. Nomination and remuneration committee. (3) Oversight committees, comprising: a. Standing committee on technology; b. Advisory committee; c. Regulatory oversight committee; and d. Risk management committee. (4) The composition, quorum and functions of the committees under sub-regulation (2) and sub-regulation (3) of these regula....
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....pply mutatis mutandis to MIIs. b. MIIs shall lay down policy for the frequency of meetings, etc., for the statutory committees. c. PIDs in Committees at MIIs: i. SECC Regulations 2018 and SEBI (D&P) Regulations 2018 prescribe that a PID on the board of a MII shall not act simultaneously as a member on more than five committees of that MII. ii. It is clarified that the above limitation on maximum number of committees that a PID can be member of, shall be applicable only to statutory committees prescribed by SEBI under SECC Regulations 2018 and SEBI (D&P) Regulations, 2018, and circulars issued thereunder. The said requirement shall not be applicable to committees constituted under Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements), 2015, amongst others. iii. In case of non-availability of adequate number of PIDs in a MII, the relevant MII shall take steps to induct more PIDs in order to fulfil the requirement of composition of committees within a MII. d. Meeting of PIDs: i. As per code of conduct for PIDs provided in SECC Regulations 2018 & SEBI (D&P) Regulations 2018, the PIDs shall be required to meet separately every six months. It is added ....
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....this circular. Further, following circulars stand partially amended as under: a. Clause 2 & 3 of SEBI circular no. CIR/MRD/DMS/ 03 /2014 dated January 21, 2014 on functions and composition of IT strategy committee of depositories, stands rescinded. b. Clause 3 of SEBI circular no. SEBI/HO/DMS/CIR/P/2017/15 dated February 23, 2017 and Clause no. 2 (B) of SEBI circular no. CIR/CDMRD/DEICE/CIR/P/2017/77 dated July 11, 2017 providing for composition and functions of former committees of MIIs, stands rescinded. c. Clause 5 of SEBI circular no. CIR/MRD/DP/ 1 /2015 dated January 12, 2015 on Risk management policy at depositories may be read as under: " The Depositories shall put in place mechanism to implement the Risk Management Framework through a Risk Management Committee which shall be headed by a Public Interest Director (PID)." Further, the responsibilities of the committee and other requirements of the circular, as provided in the said circular shall continue to be applicable to depositories. d. In SEBI circular no. SEBI/HO/CDMRD/DMP/CIR/P/2016/103 dated September 27, 2016, references to 'Risk management committee' shall be replaced with 'Membership selection comm....
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....ongst various dues and claims against the defaulter/ expelled member in accordance with the Rules, Byelaws and Regulations of the Exchange In the event both the clearing member and the constituent trading member are declared defaulter, then the membership selection committee of the stock exchange and that of the clearing corporation shall work together to realise the assets of both the clearing member and the trading member. Admission or rejection of claims of client/trading members/clearing members over the assets of the defaulter/expelled member. • • Recommendation in respect of the claims to the Trustees of the IPF on whether the claim is to be paid out of IPF or otherwise. To oversee contribution towards Core Settlement Guarantee Fund (SGF) of the Clearing Corporation • A maximum of two Key Management Personnel (KMPs) of the exchange can be on the committee one of which shall necessarily be the Managing Director of the stock exchange. • The committee may also include independent external persons. • SEBI may nominate members in the Committee, if felt necessary in the interest of securities market. • The number of PIDS....
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....tee 6 Sr no. Name Committee of Brief terms of reference (II) Oversight Committees • Besides the above, it will also discharge the function as Nomination & Remuneration Committee under the Companies Act, 2013 and SEBI (LODR) regulations, 2015 as amended from time to time. Composition 4. Standing Committee on Technology • Monitor whether the technology used remains up to date and meets the growing demands of the markets. • • • • • • • . • 5. Advisory Committee • Monitor the adequacy of systems capacity and efficiency. To look into the changes being suggested by the exchange to the existing software/ hardware. Investigate into problems of computerized trading system, such as hanging/ slowdown/ breakdown. Ensure that transparency is maintained in disseminating information regarding slowdown/ breakdown in Online Trading System. Submit a report to the Governing Board, who shall deliberate on the report and take suitable action/ remedial measure. Explain any stoppage beyond five minutes and report to the Board. The Exchange shall also issue a press release specifying the reasons ....
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....ersee SEBI inspection observation on Product Design related issues. Estimate the adequacy of resources dedicated to Product design related function. Review the actions taken to implement the suggestions of SEBI's Inspection Reports, place the same before the Governing Board of the stock exchange Composition • • The committee shall comprise of public interest director and independent external persons. The number of PIDS shall not be less than the total of number of independent external persons put together. • Also shareholder director and key management personnel may be invitee to the committee. 8 Sr no. Name Committee of Brief terms of reference To follow up, ensure compliance/implementation of the inspection observations. Supervising the functioning of Investors Services Cell of the exchange, which includes review of complaint resolution process, review of complaints remaining unresolved over long period of time, estimate the adequacy of resources dedicated to investor services, etc. Supervise Investor Service Fund, including its utilization Annual review of arbitrators and arbitration awards (both quantum and quality of the awards)....
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....earing corporations with commodity segment, the committee shall also look into: o Approving enplanement & cancellation of Warehouse Service Providers/Vault Service Providers /Assayers, accreditation of warehouse, etc. • Reviewing the continuous functioning, monitoring, and compliance of norms by Warehouse Service Providers, Vault Service Providers and assayers. Formulate policy for regulatory actions, including warning, monetary fine, suspension, deactivation of terminal, declaring a member as defaulter expulsion, to be taken for various violations by the members of the clearing corporation. • Based on the laid down policy, the Committee shall consider the cases of violations observed during inspection, etc. and impose appropriate regulatory measure on the members of the clearing corporation. While imposing the regulatory measure, the Committee shall adopt a laid down process, based on the 'Principles of natural justice'. • Realize the assets / deposits of defaulter/expelled member and appropriate amongst various dues and claims against the defaulter/ expelled member in accordance with the Rules, Byelaws and Regulations of the Clearing corpor....
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....associated with a clearing member in any manner. The disclosures and code of conduct prescribed under para 3.4 and 4 of SEBI circular Ref. No. CIR/MRD/DSA/24/2010 dated August 11, 2010, shall be applicable, as far as may be, to members of IGRC also. • The Committee shall include only public interest directors. • However, independent external persons may be part of the committee for the limited purpose of recommendation relating to selection of Managing Director; wherein the number of PIDS shall not be less than the independent external persons. 12 Sr no. Name Committee of Brief terms of reference Act, 2013 and SEBI (LODR) regulations, 2015 as amended from time to time. Composition (II) Oversight Committees 4. Standing • Committee on Technology 5. Advisory Committee • • • Monitor whether the technology used by the clearing corporation remains up to date and meets the growing demands. Monitor the adequacy of system capacity and efficiency. Look into the changes being suggested to the existing software/hardware. Investigate into the problems computerised risk management / clearing & settlement system, such ....
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....ess, review of complaints unresolved over long period of time, estimate the adequacy of resources dedicated to investor services, etc. Lay down procedures for the implementation of the Code Prescribe reporting formats for the disclosures required under the Code. Oversee the implementation of the code of ethics. To periodically monitor the dealings in securities of the Key Management Personnel To periodically monitor the trading conducted by firms/corporate entities in which the directors hold twenty percent or more beneficial interest or hold a controlling interest. Reviewing the fees and charges levied by a Clearing Corporation Monitoring implementation of SECC Regulations and other applicable rules and regulations along-with SEBI Circulars and other directions issued thereunder The head(s) of department(s) handling the above matters shall report directly to the committee and also to the managing director. Any action of a recognized clearing corporation against the aforesaid head(s) shall be subject to an appeal to the committee, within such period as may be determined by the governing board The committee shall comprise of public interest director and inde....
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....aints referred to it by the depositories, hear ⚫ the parties and resolve their complaints. • • • • • A maximum of two key management personnel of the depositories can be on the committee one of which shall necessarily be the Managing Director of the depositories. The committee may also include independent external persons. SEBI may nominate members in the Committee, if felt necessary in the interest of securities market The number of PIDS shall not be less than the total of number of shareholder directors, KMPs and independent external persons put together. The IGRC shall comprise of a single person for claims up to Rs. 25 Lakh, whereas, for claims above Rs. 25 Lakh, the IGRC shall comprise of three persons The IGRC shall comprise of independent external persons with qualifications in the area of law, finance, accounts, economics, management or administration and experience in financial services, including securities market. The members of IGRC shall not be associated with a depository participant in any manner. The disclosures and code of conduct prescribed under para 3.4 and 4 of SEBI circular Ref. No. 16 Sr no. ....
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....itory system The Committee shall submit a report to the Governing Board of the depository. The Board will deliberate on the report and suitable action/remedial measure will be taken. • Explain any system outage related incidents to the governing board. • Review the implementation of board approved cyber security and resilience policy and its framework • Such other matters in the scope as may be referred by the Governing Board of the depository and/or SEBI. To advise the Depository on non-regulatory and operational matters including technology, charges and levies, amongst others Composition • The number of PIDs shall not be less than the total of number of shareholder directors and depository participants put together. The Committee shall comprise of depository participants of the depository. The chairperson of the governing board shall be the head of the advisory committee • The managing director shall be a permanent invitee to every meeting of the advisory committee 18 Sr no. 60 Name of Committee Regulatory Oversight Committee Brief terms of reference To lay down procedures for the implementation of the Code of Ethic....