Cap on ten­ure of SE CEOs likely

Financial Chronicle - - MONEY GAME - PRESS TRUST OF IN­DIA

REG­U­LA­TOR Sebi is con­sid­er­ing cap­ping ten­ure of stock ex­change CEOs to max­i­mum two terms of five years each, as part of an over­haul of reg­u­la­tions for own­er­ship and gov­er­nance norms for mar­ket in­fra­struc­ture in­sti­tu­tions.

Be­sides, the watch­dog is plan­ning to bring in new own­er­ship norms for set­ting up of stock ex­changes as it feels that en­try of new play­ers can ben­e­fit in­vestors with bet­ter prod­uct choices and ef­fec­tive cost struc­tures, a se­nior of­fi­cial said.

At its next board meet­ing sched­uled for June 21, Sebi would pro­pose com­ing out with a con­sul­ta­tion pa­per for var­i­ous reg­u­la­tory and pro­ce­dural re­quire­ments for set­ting up of MIIs, in­clud­ing stock ex­changes. Sebi is also look­ing to har­monise the share­hold­ing limit across stock ex­changes, clear­ing cor­po­ra­tions and de­pos­i­to­ries, ac­cord­ing to a se­nior of­fi­cial.

Fur­ther, it is pro­posed to ex­pand the def­i­ni­tion of key man­age­rial per­son­nel at these in­sti­tu­tions whereby a per­son up to two lev­els below MD/ CEO would be deemed as a key man­age­rial per­son­nel.

In March this year, a com­mit­tee, headed by for­mer RBI deputy gov­er­nor R Gandhi, had sub­mit­ted a re­port on re­view of reg­u­la­tions and rel­e­vant cir­cu­lars per­tain­ing to MIIs (Mar­ket In­fra­struc­ture In­ter­me­di­aries) in March this year.

Based on the panel's rec­om­men­da­tions, Sebi plans to change the ex­ist­ing norms in this re­gard.

"A per­son may serve as MD/ CEO of a MII for a max­i­mum of two terms of up to five years each or up to 65 years of age, which­ever is ear­lier," the of­fi­cial said, adding that it would also be ap­pli­ca­ble for serv­ing MDs and CEOs of such in­sti­tu­tions.

At present, Sebi norms do not stip­u­late max­i­mum tenures for MD/ CEO of MIIs. The watch­dog is look­ing at har­mon­is­ing the share­hold­ing limit across all MIIs whereas there are re­stric­tions now.

While for­eign en­ti­ties can have up to 15 per cent stake in stock ex­changes, the same is lim­ited to 5 per cent in the case of clear­ing cor­po­ra­tions.

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