Sebi's New Rules for Stock Market: Easing Regulations and Strengthening Cybersecurity

Markets regulator Sebi approved several new regulations, including removing financial disincentives for MIIs' MDs and CTOs, easing business regulations for investment trusts, and setting new cybersecurity frameworks. These changes aim to enhance market efficiency and attract better talent while ensuring robust cybersecurity protocols.

The Securities and Exchange Board of India (Sebi) has introduced significant regulatory changes aimed at enhancing market efficiency and security. These changes include the removal of financial disincentives for Managing Directors (MDs) and Chief Technology Officers (CTOs) of Market Infrastructure Institutions (MIIs) in the event of technical glitches. The decision was prompted by recommendations from various advisory committees and feedback from MIIs about the negative impact of such penalties on attracting and retaining top talent.

In a bid to streamline operations and facilitate business activities related to Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), Sebi has approved the reduction of notice periods for unitholder meetings and revised timelines for distribution payments. Additionally, it has allowed exemptions from certain disclosure requirements for University Funds and University-related Endowments.

On the cybersecurity front, Sebi has formulated a new Cybersecurity and Cyber Resilience Framework (CSCRF) for its regulated entities. This framework categorizes entities into five groups based on their operations, including MIIs and various scales of regulated entities, and sets forth resiliency goals inspired by CERT-In's Cyber Crisis Management Plan. The new framework will be implemented in phases starting January 1, 2025.

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