SEBI not to prescribe cooling-off period for independent directors in MII

In a bid to improve ease of doing business, SEBI has decided not to prescribe a cooling-off period for public interest directors transitioning from one market infrastructure institution (MII) to another.

The capital market regulator has shifted the responsibility of appointing specific key managerial personnel in MIIs to the governing Board from the nomination and Remuneration Committee.

MII may prescribe a minimum cooling-off period for its key managerial positions and directors, including Managing Director and PIDs, before joining a competing MII.

If the governing board of an MII decides not to re-appoint an existing PID after his first term, it must record the rationale for this decision and communicate it to SEBI, it said.

The existing process for the appointment of PIDs, which requires prior approval of SEBI but not that of shareholder approval will continue, said SEBI.

The appointment, re-appointment, or termination of specific KMPs in Critical Operations, Regulatory, Compliance, Risk Management and Investor Grievances will require approval of the Governing Board of the MII, which was hitherto with the Nomination and Remuneration Committee of the MII, said SEBI.