Schedule - II (Part - I) - Norms for compensation policy - Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

PART - I Norms for compensation policy [See regulation 27 (3)] 1 [ (1) Regulation 27 of these regulations mandates that the compensation policy for key management personnel of recognised stock exchange or recognised clearing corporation shall be in accordance with the norms specified by the Board. The compensation norms, in this regard, shall be as follows:- i. The variable pay component shall be within a range of 25% to 50% of total pay. ii. 50% of the variable pay shall be paid on a deferred basis after a minimum period of three years. iii. ESOPs and other equity linked instruments in the stock exchange/ clearing corporation shall not be offered or provided as part of the compensation for the key management personnel. iv. The compensation policy shall have malus and clawback arrangements. ] (2) Apart from the above, the compensation policy of the stock exchange/ clearing corporation shall take into consideration the following: (a) financial condition / health of the stock exchange/ clearing corporation, (b) average levels of compensation payable to employees in similar ranks, (c) shall not contain any provisions regarding incentives to take excessive risks over the short term, (d) revenues, net profit of the stock exchange/ clearing corporation, (e) comparable to the industry standards, (f) role and responsibilities of the key management personnel, (g) periodic review (3) At the time of seeking approval of the Board for the appointment of the managing director, the stock exchange/ clearing corporation shall seek approval for the compensation of the managing director from the Board. The compensation of the Managing Director of a stock exchange/clearing corporation already appointed with the approval of the Board shall be in accordance with the compensation policy as mentioned above. The same shall be submitted to the Board for approval within three months from the date of issue of these regulations. *************** NOTES:- 1. 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, (1) Regulation 27 of the these Regulations mandates that the compensation policy for key management personnel of stock exchange/ clearing corporation shall be in accordance with the norms specified by the Board. The compensation norms, in this regard, shall be as follows:- (a) The variable pay component shall not exceed one-third of total pay. (b) 50% of the variable pay shall be paid on a deferred basis after three years. (c) ESOPs and other equity linked instruments in the stock exchange/ clearing corporation shall not be offered or provided as part of the compensation for the key management personnel. (d) The compensation policy shall have malus and clawback arrangements.