Skip to main content

SEBI plans to tighten appointment rules for top executives at MIIs

By
SEBI plans to tighten appointment rules for top executives at MIIs
The move comes at a time the Reserve Bank of India (RBI) is said to have raised objections over Axis Bank's decision to reappoint Shikha Sharma
The Securities and Exchange Board of India (Sebi) is planning to tighten rules governing the appointment process for top executives at market infrastructure institutions (MIIs) such as exchanges, clearing corporations and depositories.According to sources, MIIs might have to appoint managing directors (MDs) and chief executive officers (CEOs) afresh after the completion of their tenure. At present, the tenure of MDs and CEOs is extended by the board and is sent for Sebi’s approval without a formal appointment process.
The move comes at a time the Reserve Bank of India (RBI) is said to have raised objections over Axis Bank’s decision to reappoint Shikha Sharma as MD and CEO for the fourth term.“If an MII decides to reappoint an existing person, the nomination and remuneration committee will have to provide justification for the move. The committee will have to perform a thorough performance appraisal of the tenure before pitching for re-appointment,” said a person in the know.
Sources said the issue of reappointment of MDs and CEOs was discussed at the last meeting of a Sebi committee set up to review regulations pertaining to MIIs. The panel is be headed by R Gandhi, former deputy governor of RBI.“Sebi wants to ensure that CEOs at important institutions don’t misuse their position by getting long tenures,” said a source.
The market regulator will firm up its view on the issue once the Gandhi committee submits its recommendations. If the rules around reappointment of MDs and CEOs are tightened, the National Stock Exchange (NSE) and the BSE will have to provide justification for offering further extension to their chiefs.
The tenure of Ashish Chauhan, MD and CEO, BSE, expires in November 2022. Chauhan’s first five-year tenure started in 2012, which was extended by another five years in 2017.Vikram Limaye, MD and CEO, NSE, was appointed for five years last year after Chitra Ramkrishna quit unexpectedly.
The tenure of the heads of both Central Depository Services (CDSL) and National Securities Depository (NSDL) is up for renewal soon.The tenure of G V Nageswara Rao, MD and CEO, NSDL, ends in July. He joined the depository in July 2013. The tenure of P S Reddy, MD and CEO, CDSL, ends later this month.According to reports, Sebi has rejected a five-year extension offered to Reddy by the CDSL board. He had joined in 2012 for a five-year tenure, which was expended by a year in 2017.
The Business Standard, New Delhi, 12th April 2018

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more