Sebi eases director eligibility rules for market infrastructure institutions

The Securities and Exchange Board of India (Sebi) on Wednesday unveiled a consultation paper proposing streamlined eligibility requirements for directors serving on governing boards of market infrastructure institutions (MIIs), along with standardized competency norms for key executives including chief technology officers and chief information security officers.

Sebi highlighted that existing regulations have created significant obstacles in attracting qualified candidates to MII boards, particularly for public interest director positions. The current framework disqualifies otherwise suitable candidates if they hold directorships at companies with even tangential links to stockbrokers or trading members, the regulator noted.

Under the proposed amendments, Sebi would extend exemptions currently available to directors of public sector banks and financial institutions to encompass directors of other relevant sectors. The regulator said these changes would address practical difficulties faced by MIIs in securing competent leadership while maintaining robust governance standards.

The consultation paper signals Sebi's intent to balance accessibility in board recruitment with the need for strong institutional oversight. The proposals will undergo stakeholder feedback before final implementation, allowing market participants and industry bodies to submit comments on the proposed framework.