Schedule - II (Part - C) - Core functions of recognised stock exchange and recognised clearing corporation - Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

1 [ PART C [See Regulation 28(2)] Core functions of recognised stock exchange and recognised clearing corporation 1. For recognised stock exchanges the core and critical functions shall include but not limited to: a. Vertical 1: Critical operations i. Provision and operation of trading facilities; ii. Record keeping and disclosure of trade related information; iii. IT infrastructure for core and critical functions; iv. Business continuity plan and disaster recovery operations; v. Cyber security and cyber resilience framework. b. Vertical 2: Regulatory, compliance, risk management and investor grievances i. Risk management; ii. Surveillance and investigation; iii. Listing; iv. Member registration; v. Compliance; vi. Inspection; vii. Enforcement; viii. Arbitration and grievance redressal mechanism; ix. Member default; x. Investor protection and services. c. Vertical 3: Other functions including business development i. Sales; ii. Marketing; iii. Product development; iv. Finance; 2. For recognised clearing corporation the core and critical functions shall include but not limited to: a. Vertical 1: Critical operations i. Provision for clearing and settlement; ii. Record keeping of information related to clearing and settlement of trades; iii. IT infrastructure for core and critical functions; iv. Business continuity plan and disaster recovery operations; v. Cyber security and cyber resilience framework. b. Vertical 2: Regulatory, compliance, Risk Management and investor grievance i. Risk management; ii. Member registration; iii. Compliance; iv. Inspection; v. Enforcement; vi. Member default; vii. Investor protection and services. c. Vertical 3: Other functions including business development i. Sales; ii. Marketing; iii. Product development; iv. Finance. ] *************** 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, PART C [See regulation 28] Measures to ensure segregation of regulatory departments (1) In order to ensure the segregation of regulatory departments, every recognised stock exchange and recognised clearing corporation shall adopt a Chinese Wall policy which separates the regulatory departments of the recognised stock exchange or recognised clearing corporation from the other departments. The employees in the regulatory departments shall not communicate any information concerning regulatory activity to any one in other departments. The employees in regulatory areas may be physically segregated from employees in other departments including with respect to access controls. In exceptional circumstances employees from other departments may be given confidential information on need to know basis, under intimation to the Compliance Officer. (2) Regulation 28 of these Regulations mandate segregation of regulatory departments from other departments. For this purpose, an indicative list of regulatory departments is given below. The governing board of the stock exchange/ clearing corporation may specify any other department having a regulatory function in addition to the list given below as a regulatory department. (3) Departments handling the following functions shall be considered as regulatory departments in a Stock Exchange:- (a) surveillance, (b) listing, (c) member registration, (d) compliance, (e) inspection, (f) enforcement, (g) arbitration, (h) default, (i) investor protection, (j) investor services, (4) Departments handling the following functions shall be considered as regulatory departments in a Clearing Corporation:- (a) Risk management, (b) member registration, (c) compliance, (d) inspection, (e) enforcement, (f) default, (g) investor protection, (h) investor services, (5) The recognized stock exchange / recognized clearing corporation shall ensure that the regulatory departments viz., surveillance, inspection, risk management, default, investor protection, investor services etc, are sufficiently staffed with adequate number of persons having professional and relevant experience at all times.