Regulation 23 - Composition of the governing board - Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

CHAPTER V GOVERNANCE OF STOCK EXCHANGES AND CLEARING CORPORATIONS Composition of the governing board 23. (1) The governing board of every recognised stock exchange and recognised clearing corporation shall include: (a) 5 [ non-independent directors ] ; (b) public interest directors; and, (c) managing director 1 [ : ] 2 [ Provided that for the purpose of limited purpose clearing corporation, the nominee director shall be treated as a 5 [ non-independent directors ] and the independent director shall be treated as a public interest director. ] (2) Subject to the prior approval of the Board, the chairperson shall be elected by the governing board from amongst the public interest directors. (3) The number of public interest directors shall not be less than the number of 5 [ non-independent directors ] on the governing board of a recognised stock exchange and recognized Clearing Corporation. (4) The managing director shall be included in the category of 5 [ non-independent directors ] 3 [ : ] 4 [ Provided that in case of a limited purpose clearing corporation, the managing director shall not be included in the category of 5 [ non-independent directors ] . ] (5) Any employee of a recognised stock exchange or recognised clearing corporation may be appointed on the governing board in addition to the managing director and such director shall be deemed to be a 5 [ non-independent directors ] . (6) No trading member or clearing member or their associates and agents, irrespective of the 6 [ recognised stock exchange or recognised clearing corporation ] of which they are members, shall be on the governing board of any recognised stock exchange or recognised clearing corporation. (7) For the purposes of sub-regulation (6) above, a person who is a director in an entity, that itself is a trading member or clearing member or has associate(s) as trading member(s) or clearing member(s) shall be deemed to be a clearing member or trading member: Provided a person shall not be deemed to be clearing member and / or trading member or their associate for the purpose of sub-regulation (6), if he/she is on the board of a public financial institution or bank which is in public sector, or which either has no identifiable ultimate promoter, or the ultimate promoter is in public sector or has well diversified shareholding , and such Public Financial Institution or Bank or its associate is a clearing member and / or trading member: Provided further that the independent directors of the associates of Public Financial Institution or Bank in public sector, who are clearing member and/or trading member and where the majority shareholding is that of such public Financial institution or bank in the public sector, shall not be deemed to be a clearing member and / or trading member for the purpose of sub-regulation (6). (8) The appointment of director shall be subject to the fulfillment of other requirements and satisfaction of the Board. (9) A recognised stock exchange and recognised clearing corporation, shall monitor and ensure the compliance of sub-regulation (6) on continuous basis, to ensure that directors appointed, on their governing board, do not get associated with trading member or clearing member after approval of appointment. (10) The number of public interest directors shall not be less than the number of 5 [ non-independent directors ] to constitute the quorum for the meeting of the governing board. (11) The voting on a resolution in the meeting of the governing board shall be valid only when the number of public interest directors that have cast their vote on such resolution is equal to more than the number of 5 [ non-independent directors ] who have cast their vote on such resolution. (12) The casting vote in the meetings of the governing board of a recognised stock exchange or a recognised clearing corporation shall be with the chairperson of the governing board. (13) No foreign portfolio investor shall have any representation in the governing board of a recognised stock exchange or a recognised clearing corporation. 7 [ (14) (a) The governing board of the recognised stock exchange and the recognised clearing corporation shall 8 [ consist of ] directors having the requisite qualifications and experience in the areas of capital markets, finance and accountancy, legal and regulatory practice, technology, risk management and management or administration: Provided that the governing board of the recognised stock exchange and recognised clearing corporation shall 8 [ consist of ] at least one public interest director having the requisite qualification and experience in each of the areas of capital markets, finance and accountancy, legal and regulatory practice, and technology. (b) The recognised stock exchange and recognised clearing corporation may also appoint directors having qualification and experience in other areas which may be specific to them: Provided that the recognised stock exchange and recognised clearing corporation shall ensure that the governing board collectively 9 [ consists of ] directors with qualifications and experience as specified at clause (a) above. ] *************** NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/93 dated 11-08-2022 before it was read as, . 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/93 dated 11-08-2022 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/93 dated 11-08-2022 before it was read as, . 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/93 dated 11-08-2022 5. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/124 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) before it was read as, shareholder directors 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/124 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) before it was read as, stock exchange / clearing corporation 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/124 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/148 dated 22-08-2023 before it was read as, comprise of 9. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/148 dated 22-08-2023 before it was read as, comprises of