Schedule - II (Part C) - Procedure for appointment of directors - Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018

PART C Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 [See regulation 25] 2 [(I)] PROCEDURE FOR APPOINTMENT OF DIRECTORS 1. All directors while seeking approval shall submit to the depository the following details a. Name b. Address c. Educational qualification d. Details of employment/ Occupation, past and present e. Details of other directorships f. DIN No. g. Declaration regarding the fulfillment of requirements specified under regulation 23 of these Regulations. h. Declaration confirming compliance of Regulation 24(10) read with Regulation 2(1)(c) of these Regulations, in respect of non-association with trading member or clearing member. i. Details of regulatory action taken by any statutory authority in India. j. Details of activities that may in the opinion of the director, lead to his disqualification. k. Association, if any, with trading members/ depository participants. l. Disclosure of the names of his dependents associated with the securities market as member, depository participant, sub-broker, authorized person or holding any registration granted by the Board. m. An undertaking that he shall abide by the code of conduct and code of ethics prescribed in Part B and Part C of Third Schedule to these Regulations. n. In the case of public interest directors, consent letters for acting as a public interest director. o. Criminal cases completed/ pending before any authority in India or abroad, if any. 7 [ (2) The depository, while recommending the name(s) of director, shall forward the above details to the Board, along with the minutes of the governing board meeting where the name(s) was approved, copy of the shareholder s resolution (wherever applicable), and a confirmation by the depository that they are fit and proper persons in terms of their fit and proper criteria, are not associated with any depository participant, trading member or clearing member in terms of regulation 24(9) read with regulation 2(1)(c) of these regulations and compliance with the requirements specified in regulation 24(14) . ] 3 [(II)] Managing Director / Executive Director:- (1) The Nomination and Remuneration Committee of the Depository shall be responsible for selection of CEO /Managing Director / Executive Director, as the case may be. The managing director shall be selected through open advertisement in all editions of atleast one national daily from amongst persons qualified in the fields of capital market/ finance/ management and possessing sufficient experience. 1 [ The depository shall forward the new names to the Board before two months from the last working day of the existing Managing Director. ] (2) In case a vacancy of managing director arises due to unforeseen reasons, the depository shall forward the new names to the Board within 60 days from the date of submission of resignation or such vacation of office. 4 [(III)] Public Interest Directors:- 8 [ (1) The names of the public interest directors shall be forwarded to the Board after the approval of the governing board of the depository. The shareholders approval shall not be necessary. A minimum of two names shall be submitted to the Board for each vacancy of public interest directors, two months before such vacancy. ] (2) The depository shall ensure that public interest directors are selected from diverse field of work. While deciding to propose a particular person as a public interest director, the depository shall also take into account the following factors: 9 [ (a) Qualifications as specified in regulation 24(14) . ] 10 [ **** ] (c) Persons currently holding positions of trust and responsibility in reputed organizations or person who have retired from such positions. (d) Persons who are likely to have interested positions in commercial contracts and financial affairs of depository may be excluded. Also, persons who are regular traders/speculators in the market or are director in the board of the applicant of the depository shall be excluded. (3) Public interest directors shall peruse the relevant laws, code of conduct, code of ethics, etc and submit an undertaking to the depository that they are aware of their role, responsibilities and obligations. 11 [ **** ] 12 [ (4) In case of reappointment of the public interest director, the depository shall apply to the Board four months before the expiry of the term. In addition to the other requirements specified herein, the application for reappointment of the public interest director shall be accompanied with, their attendance details on meetings of various mandatory committees and on the governing board of the depository, performance review and the reasons for extension of term. ] 13 [ (5) The existing public interest director, may continue holding the post for a maximum period of three months from the date of expiry of their term, or till a new public interest director is appointed, whichever is earlier, only if the governing board does not meet the mandatory regulatory requirements on its composition. ] 5 [(IV)] 14 [non-independent directors.]:- (1) The names of person(s) to be appointed as 15 [ non-independent directors ] shall first be approved by the governing board of the depository followed by shareholders approval before submitting the same to the Board for approval. 16 [ (2) The manner of election, appointment, tenure, resignation, vacation, etc. of a non-independent director shall be governed by the provisions applicable to shareholder directors under the Companies Act, 2013 , save as otherwise specifically provided under these Regulations or circulars issued thereunder. ] 6 [(V)] General conditions on appointment of directors:- (1) The depository shall complete the appointment process within 30 days from Boards nomination/approval for directors and submit a compliance report within one week from the date of appointment. (2) In case any other official of the depository is appointed on the governing board in addition to the Managing Director, the same shall be subject to the approval of shareholders and the Board, in that order. 17 [ (VI.) The depository shall provide at least seven days of training to all directors each year. ] ************* NOTES:- 1. Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/20 dated 04-06-2019 2. Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/20 dated 04-06-2019 3. Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/20 dated 04-06-2019 4. Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/20 dated 04-06-2019 5. Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/20 dated 04-06-2019 6. Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/20 dated 04-06-2019 7. 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, (2) The depository, while recommending the names of director, shall forward the above details to the Board, along with the minutes of the meeting of the governing board where the name was approved, copy of the shareholder s resolution (wherever applicable), a confirmation by the depository that the director is a fit and proper person in terms of the criteria specified in these regulations and are not associated with any depository participant, trading member or clearing member in terms of regulation 24(10) read with regulation 2(1)(c) of these Regulations. 8. 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, (1) The names of public interest directors shall be forwarded to the Board after the approval of the Board of the depository. The shareholders approval shall not be necessary. A minimum of two names shall be submitted to the Board for each vacancy of public interest directors. 9. 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, (a) Qualification in the area of law, finance, accounting, economics, management, administration or any other area relevant to the financial markets. 10. Omitted 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, (b) At least one person may be inducted having experience and background in finance/accounts who may preferably be inducted in the audit committee. 11. Omitted 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, The depository may conduct familiarization programmes for newly appointed Public Interest Directors and may also conduct annual training for every public interest director. 12. 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, (4) In case of extension of the term of the public interest director or appointment of a new public interest director, the depository shall apply to the Board two months before the expiry of the term. In addition to the other requirements prescribed herein, the application for extension of term of the public interest director shall be accompanied with, his attendance details on meetings of various committees and on the governing board of the stock exchange / clearing corporation, performance review and the reasons for extension of term. 13. 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, (5) The existing public interest director shall continue holding the post, till a new public interest director is appointed in his place. 14. 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, Share Holder Directors 15. 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, shareholder director(s) 16. 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, (2) The manner of election, appointment, tenure, resignation, vacation, etc., of a shareholder director shall be governed by the Companies Act, 2013, save as otherwise specifically provided under these Regulations. 17. 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)