On Jan. 30, 2025, IND SEBI updated Parameters for external evaluation of performance of statutory committees of MIIs, and Mechanism for internal evaluation of performance of MIIs and its statutory committees, to ensure consistency and uniformity.
Stipulated criteria for independent external evaluation; rating framework; principles for appointment of independent external agency; timeline; and internal evaluation.
External evaluation will be conducted every 3 years by independent external agency, assessing roles and responsibilities, meeting effectiveness, and governance aspects.
Internal evaluations will be conducted annually by MIIs, after developing a set of criteria; the first report will be due within three months after the end of FY 2024-25.
MIIs must implement evaluation process, amend their bye-laws, rules, regulations, and disseminate information to market participants through their websites.
The circular will come into effect 30 days after issuance, i.e., from Mar. 1, 2025.
On Sep. 24, IND SEBI issued parameters for performance evaluation.
IND SEBI issued parameters for performance evaluation of market infrastructure institutions (MIIs), including stock exchanges, clearing corporations, and depositories.
MIIs must appoint an independent external agency to evaluate their performance.
Evaluation Framework
Evaluation framework includes specific criteria such as technology resilience, investor education and protection, regulatory role efficiency, compliance with norms.
As well as governance practices; resource adequacy, and fair access and disclosure.
Rating system is developed to compare performance of MIIs, monitor trends over time.
External agency must obtain no objection certificate from SEBI, ensure no conflict of interest and have requisite knowledge and expertise in securities market operations.
Independent external evaluation to occur once every three years; first evaluation for financial year (FY) 2024-2025, with the report to be submitted by Sep. 30, 2025.
KPIs of key management personnel to be clearly defined; performance evaluation to have at least 50% weightage for regulatory, compliance, risk management outcomes.
Effectiveness
The provisions come into force 30 days from the date of issuance, i.e. Oct. 24, 2024.
Jan. 2025 Evaluation Guidelines
On Jan. 30, 2025, IND SEBI updated Parameters for external evaluation of performance of statutory committees of MIIs, and Mechanism for internal evaluation of performance of MIIs and its statutory committees, to ensure consistency and uniformity.
Stipulated criteria for independent external evaluation; rating framework; principles for appointment of independent external agency; timeline; and internal evaluation.
External evaluation will be conducted every 3 years by independent external agency, assessing roles and responsibilities, meeting effectiveness, and governance aspects.
Internal evaluations will be conducted annually by MIIs, after developing a set of criteria; the first report will be due within three months after the end of FY 2024-25.
MIIs must implement evaluation process, amend their bye-laws, rules, regulations, and disseminate information to market participants through their websites.
The circular will come into effect 30 days after issuance, i.e., from Mar. 1, 2025.
