BENGALURU (Reuters) – India’s market regulator on Friday proposed stricter rules for hiring top jobs at securities-focused institutions such as stock markets, clearing houses and depositories, including consultation with an outside agency during their search for candidates.
The Securities and Exchange Board of India (SEBI) consultation paper suggested that these market infrastructure institutions (MII) should collaborate with an independent external agency to identify and appoint suitable candidates for top positions such as compliance officer, chief risk officer and chief technology officer to recommend.
The regulator said the external agency is required to submit its recommendations to the institutions, though the final decision would rest with their board after considering SEBI’s comments on candidates.
While SEBI selects and approves the appointment of directors of MIIs, key roles such as CO, CTO and CRO are appointed by the institution’s appointment committee.
The regulator said that given the importance of MIIs, it was important that key personnel were able to operate independently of short-term commercial considerations, and therefore emphasized the need for stricter regulation.
The SEBI proposed that the reappointment and removal of key personnel would be based on the recommendation of the MII appointments committee, with the final nod from the board coming after a review by the regulators.
The regulator also suggested that MII prescribe a minimum cooling-off period for key management staff and directors before joining a competing institution.
The SEBI has sought public comments on the proposals by December 12.
(Reporting by Nishit Navin in Bengaluru; Editing by Anil D’Silva)
