'MDs at exchanges, depositories, to have 2 terms of 5 years each'

MUMBAI: Managing directors at stock exchanges, depositories and clearing corporations can have a most of two phrases of 5 years each and every, in step with markets regulator Sebi.

The transfer comes after the board of Sebi in June approved changes to regulations governing Market Infrastructure Institutions (MIIs) during which the primary time period in stock exchanges, depositories and clearing corporations may be extendable through another time period, matter to adequate performance assessment.

Besides, a cooling-off duration of 1 year should be acceptable previous to nomination as a public hobby director (PID) in another MII, while that of 3 years for a director to grow to be a shareholder director in the similar institution or a director in its subsidiary.

"A person shall be nominated as a public interest director for a maximum of three terms across a depository/a recognised stock exchange / a recognised clearing corporation, subject to a maximum age limit of 75 years," the Securities and Exchange Board of India (Sebi) stated in two separate notifications dated October three.

Further, the regulator stated, "appointment of the managing director shall be for a term not exceeding five years. Provided that post the completion of first term as Managing Director, the depository shall conduct the appointment process afresh".

As according to the notification, a person may be appointed as Managing Director through the depository or a recognised stock alternate or recognised clearing company "for a maximum of two terms not exceeding five years each subject to a maximum age limit of 65 years".

The regulator has also "harmonised" the shareholding limits, which can also be held through each eligible domestic and foreign entities in a MII, so as to carry parity throughout them.

The eligible domestic and foreign entities might achieve or cling up to 15 according to cent shareholding in case of depository and clearing company, which is the case with the stock exchanges.

According to the regulator, the selection of PIDs, at the governing board and the committees of the MIIs, should be a minimum of equivalent to the selection of shareholder directors (including the managing director) and in case of an equality of votes, the chairperson of the board or committee (who's a PID), should have a second or casting vote.

The regulator has also changed the definition and norms in relation to disclosure of the reimbursement of the important thing management personnel.

The definition has been changed to include, any person who directly reviews to the CEO or director of the governing board of the MII or any person up to two levels underneath MD or CEO.

The regulator directed MIIs to expose the ratio of reimbursement paid to them vis-a-vis median of reimbursement paid to all their staff.
'MDs at exchanges, depositories, to have 2 terms of 5 years each' 'MDs at exchanges, depositories, to have 2 terms of 5 years each' Reviewed by kailash soni on October 09, 2018 Rating: 5
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