PTI New Delhi

Markets regulator Sebi has strengthened the governance framework of market infrastructure institutions -- stock exchanges, clearing corporations and depositories -- by prescribing a mandatory cooling-off period for directors before they can join a competing institution.

To give this effect, Sebi has amended Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 or SECC Regulations as well as Depositories and Participants norms 2018.

In two separate notifications dated April 30, Sebi said that a non-independent director serving on the board of a market infrastructure institution will be eligible for direct appointment to the board of a competing institution after meeting two conditions -- a cooling-off period and prior approval of the appointment from the regulator.

"Non-independent director on the governing board of a recognised stock exchange or a recognised clearing corporation may be appointed in another recognised stock exchange or a recognised clearing corporation or a depository with the prior approval of the Board (Sebi), only after a cooling-off period as may be specified by the governing board of such recognised stock exchange or recognised clearing corporation," Sebi said.

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