SEBI/HO/MRD/TPD -1/P/CIR/2024/124

guidelines · 1992 · State unknown

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Parent: THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (7c4c1f5343adab106c3a94cafc08a5ecf5957ae7)

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CIRCULAR SEBI/HO/MRD/TPD -1/P/CIR/2024/124 To All Stock Exchanges All Clearing Corporations All Depositories Dear Sir/ Madam, Subject: Ease of Doing Business in the context of Standard Operating Procedure for payment of "Financial Disincentives" by Market Infrastructure Institutions (MIIs) as a result of Technical Glitch Para 9.3 of Chapter 2 of SEBI Master Circular for Stock Exchanges and Clearing Corporations dated October 16, 2023 , and Para 4.70 of SEBI Master Circular for Depositories dated October 06, 2023 , have specified the Standard Operating Procedure (SOP) for handling of technical glitches by Market Infrastructure Institutions (MIIs) and payment of "Financial Disincentives" thereof . The said SOP , interralia , has provision for automatic trigger of financial disincentive on the MII and individuals i.e. Managing Director (MD) and Chief Technology Officer (CTO) of the MII if predefined criteria in handling of technical glitches are not adhered to. In this regard , SEBI received recommendations/ references to review imposition of Financial Disincentive on individuals from various fora like Committee on "Strengthening Governance of Market Infrastructure Institutions" , Working Group on Ease of Doing Business (EoDB) and Technical Advisory Committee (TAC) of SEBI . Separately, MIIs had also jointly represented that such disincentives on individuals may be reviewed for Ease of Doing Business of MIIs. September 20, 2024 Pursuant to deliberations, it was noted that operations of MIIs are increasingly becoming system driven, with them operating constellation of IT systems (both software and hardware) having dependency on various vendors/ service providers. Further, the test for ascertaining any individual responsibility for a technical glitch would entail ascertainin

Rule TOC

4 · 1.Para 9.3.4 of aforesaid Master Circular for Stock Exchanges and Clearing Corporations dated October 16, 2023, and Para 4.70.4 of SEBI Master Circular for Depositories dated October 06, 2023, are modified as below:

4 · 2. " Financial disincentive on Managing Director (MD) and Chief Technology Officer (CTO) of MII Separately" y" as mentioned in Clauses 3,4,5 of Annexure XII to the Master Circular for Stock Exchanges and Clearing Corporations dated October 16, 2023, and Clauses 3,4,5 mentioned under sub-para 4.70.5.B of the SEBI Master Circular for Depositories dated October 06, 2023, stand deleted .

4 · 3.The words "MD and CTO" in Clause 7 of Annexure XII of the Master Circular for Stock Exchanges and Clearing Corporations dated October 16, 2023, and Clause 7 mentioned under para 4.70.5.B of the SEBI Master Circular for Depositories dated October 06, 2023, stand deleted.

4 · 4.Clauses 8 and 9 of Annexure XII of the said Master Circular for Stock Exchanges and Clearing Corporations dated October 16, 2023, and Clauses 8 and 9 mentioned under para 4.70.5.B of the SEBI Master Circular for Depositories dated October 06, 2023 , have been modified as below:

4 · 5.Further, the following text has been inserted post Clause 2.2 of Annexure XI of the aforesaid Master Circular for Stock Exchanges and Clearing Corporations and Clause 2.2 of para 4.70.5.A of the SEBI Master Circular for Depositories:

2 · 3 SEBI on identification of the Technical Glitch resulting into Financial

2 · 4 MIIs shall carry out internal examination pertaining to occurrence of technical glitches to ascertain individual accountability and take appropriate action including