Schedule - II (Part D) - Norms for compensation policy - Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018

PART D Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 [See regulation 28 (3)] Norms for compensation policy (1) Regulation 28 of these Regulations mandates that the compensation policy for key management personnel of depository 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 1 [ be within a range of 25% to 50% of total pay ] . b) Fifty percent of the variable pay shall be paid on a deferred basis after 2 [ a minimum period of ] three years. c) ESOPs and other equity linked instruments in the depository 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. (2) Apart from the above, the compensation policy of the depository shall take into consideration the following: a) financial condition / health of the depository 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 depository, e) comparable to the industry standards, f) role and responsibilities of the key management personnel, g) periodic review (3) Further, at the time of seeking approval of the Board for the appointment of the managing director, the depository shall seek approval for the compensation of the managing director from the Board. ************ NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/125 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, not exceed one-third of total pay 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/125 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)