The Securities and Exchange Board of India (SEBI) on September 09, 2026, issued Consultation Paper on “Strengthening Governance of MIIs” to strengthen governance of Market Infrastructure Institutions (MIIs), focusing on two areas: (i) reviewing eligibility criteria for appointment of directors on MII governing boards, and (ii) introducing a Standard Operating Procedure (SOP) prescribing qualifications, experience, skill-set and certifications for key KMPs such as the CTO, CISO, Compliance Officer and Chief Risk Officer.
For MII directors, SEBI proposes relaxing the existing restrictions that may disqualify a person from becoming a director merely because the company or its broader conglomerate has an associate that is a Trading Member (TM), Clearing Member (CM) or Depository Participant (DP). The existing exemption available to directors of public-sector banks and financial institutions would be extended to companies having well-diversified shareholding. A company would be considered well-diversified where no non-public-sector shareholder, individually or along with persons acting in concert, directly or indirectly holds 10% or more stake, control or voting rights.
For key KMPs, SEBI proposes that each MII establish an SOP specifying the relevant qualification, experience, skill-set and certification requirements for the CTO, CISO, Compliance Officer and Chief Risk Officer. The SOP would be approved by the MII's Governing Board after considering inputs from the relevant committees—SCOT for CTO/CISO, ROC for the Compliance Officer and RMC for the Chief Risk Officer. Given the critical nature of these functions, SEBI also proposes that vacancies in these positions be filled within three months, with advance planning where a vacancy is anticipated.
SEBI has invited public comments on these proposals, including whether MIIs should be required to appoint deputies for these critical KMP positions to ensure continuity. Comments may be submitted by September 30, 2026, through SEBI's public-comment portal or, in case of technical difficulties, by email to the specified SEBI address.
