The Securities and Exchange Board of India (SEBI) announced on Tuesday new guidelines for the performance evaluation of market infrastructure institutions (MIIs), including stock exchanges, clearing corporations, and depositories, to be conducted by independent external agencies. These guidelines aim to establish consistency and uniformity in evaluations.
Under the new criteria, the performance evaluation will be based on seven key parameters: technology resilience (40%), investor education (17%), regulatory compliance (15%), governance practices (8%), and a combined 10% for adequacy of resources and fair access to all stakeholders, along with information disclosure.
MIIs are mandated to appoint independent external agencies for performance evaluations every three years. These agencies must possess relevant expertise in the securities market and obtain a “No Objection Certificate” (NOC) from Sebi, according to the regulator’s circular. The inaugural evaluation will cover the financial year 2024-25, with reports due by September 30, 2025, and subsequent evaluations will follow every three years.
Additionally, the Managing Director (MD) and Key Management Personnel (KMP) of MIIs will also undergo evaluation, with a significant portion of their performance assessments focused on regulatory, risk management, and compliance outcomes.
These guidelines, approved by Sebi’s board in June, will take effect 30 days after issuance, requiring MIIs to implement the necessary measures.
