Sebi Issues Performance Evaluation Guidelines for Market Infrastructure Institutions

Sebi has introduced new guidelines for the performance evaluation of market infrastructure institutions such as stock exchanges, clearing corporations, and depositories. The evaluation by independent external agencies will cover technology resilience, investor education, regulatory compliance, and other key criteria. The first evaluation is set for the financial year 2024-25.

The Securities and Exchange Board of India (Sebi) on Tuesday unveiled guidelines for the performance evaluation of market infrastructure institutions (MIIs), including stock exchanges, clearing corporations, and depositories, to be conducted by independent external agencies.

Aimed at ensuring uniformity and consistency in evaluations, the guidelines set forth seven key criteria such as technology resilience (40 percent), investor education (17 percent), regulatory compliance (15 percent), governance practices (8 percent), and 5 percent each for adequacy of resources, fair access and treatment to stakeholders, and information disclosure.

MIIs must appoint independent external agencies with relevant expertise in the securities market for evaluations every three years, starting with the 2024-25 financial year. The first evaluation report is due by September 30, 2025. Sebi's circular mandates that a significant portion of the performance review of Managing Directors (MDs) and Key Management Personnel (KMPs) will focus on regulatory, risk management, and compliance outcomes. The circular's provisions become effective 30 days from issuance, necessitating MIIs to prepare for implementation.

(With inputs from agencies.)