BENGALURU (Reuters) – India’s markets regulator on Friday proposed tighter hiring rules for top jobs at securities-focussed institutions such as stock markets, clearing firms and depositories, including consulting with an external agency during their search for candidates.
The Securities and Exchange Board of India’s (SEBI) consultation paper proposed that these market infrastructure institutions (MII) should engage with an independent external agency to identify and recommend suitable candidates for top posts such as compliance officer, chief risk officer and chief technology officer.
The regulator said the external agency is required to submit its recommendations to the institutions, although the final decision would lie with their board, after considering SEBI’s comments on candidates.
While the SEBI selects and approves the appointment of managing directors of MIIs, key roles such as CO, CTO and CRO are named by the nomination committee of the institution.
The regulator said that given the significance of MIIs, it was important for key personnel to operate independent of short-term commercial considerations, and hence flagged the need for tighter regulations.
The SEBI proposed that the re-appointment and termination of key personnel are to be based on the recommendation of the nomination committee of the MII, with the final nod coming from the board after a regulatory review.
The regulator also proposed that MII prescribe a minimum “cooling-off” period for key managerial personnel and directors before they join a competing institution.
The SEBI has sought public comments on the proposals by Dec. 12.
(Reporting by Nishit Navin in Bengaluru; Editing by Anil D’Silva)
