Market regulator Sebi has advanced governance reform proposals for market infrastructure institutions MIIs, aiming to broaden access to leadership expertise and strengthen core governance functions.
The proposed measures include two main elements: relaxed director eligibility rules and standardised requirements for four key management roles across MIIs. The changes are designed to widen the pool of qualified candidates while enhancing technology, cybersecurity, compliance and risk management across critical market infrastructure entities.
Key proposals
- Relaxed director eligibility rules. The reforms would relax the criteria governing who may be appointed or elected as directors on MII boards, with the objective of expanding the set of possible candidates to include individuals with relevant expertise.
- Standardised requirements for four key management roles. The proposals would establish uniform qualification and experience standards for four senior management positions within MIIs, aligning governance practices across institutions.
Rationale and potential impact
The intent is to widen access to expertise while reinforcing governance capabilities across MIIs. Strengthening technology, cybersecurity, compliance and risk management is positioned to improve resilience and oversight of entities that support trading, clearing and settlement in financial markets.
Implications for stakeholders
- For taxpayers and the public: stronger governance of market infrastructure may help reduce systemic risk in financial markets.
- For market participants and issuers: clearer governance standards could influence how MIIs are managed and regulated.
- For investors: enhanced governance and risk controls in MIIs may bolster confidence in market infrastructure resilience.
- For regulators: this framework provides a consistent governance model across MIIs, aiding supervision and conformity monitoring.
