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TMI BlogCode of conduct for participantsX X X X Extracts X X X X X X X X Extracts X X X X ..... activities undertaken by him on behalf of the beneficial owners. 5. A participant shall endeavour to resolve all the complaints against it or in respect of the activities carried out by it as quickly as possible, and not later than one month of receipt. 6. A participant shall not increase charges/fees for the services rendered without proper advance notice to the beneficial owners. 7. A participant shall not indulge in any unfair competition, which is likely to harm the interests of other participants or investors or is likely to place such other participants in a disadvantageous position while competing for or executing any assignment. 8. A participant shall not make any exaggerated statement whether oral or written to the clients either about its qualifications or capability to render certain services or about its achievements in regard to services rendered to other clients. 9. A participant shall not divulge to other clients, press or any other person any information about its clients which has come to its knowledge except with the approval/authorisation of the clients or when it is required to disclose the information under the requirements of any Act, Rules or Regulations. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all ensure that good corporate policies and corporate governance are in place. 1 [PART-B Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 [SEE REGULATION 27] Code of Conduct for governing board, directors, committee members and key management personnel I. Governing Board The governing board of the depository shall (a) evaluate profitability margins of the depositories. (b) ensure adequacy of resource allocation (both financial and human) towards regulatory compliances. (c) focus on strategy, policy level issues and important matters and may review the day-to-day operational matters only in exceptional cases. (d) oversee the critical operations including technology as well as the regulatory, risk management, compliance and investor grievance redressal functions of the depository. (e) take the lead in succession planning for managing director and other key positions. (f) play an active role in defining, establishing and documenting risk management framework, covering risk appetite or risk tolerance policy of the depository and ensure that the policy contains the following. i. role of risk appetite in key processes ii. clear quantitative metrics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any other person as determined by the public interest directors and non-independent directors to discuss important issues concerning the depository, on a periodic basis as specified by the Board. (o) periodically review the frequency of meetings and agenda items of the governing board to ensure that the number of meetings is rationalized and all important issues are discussed. (p) ensure that the agenda papers are approved by the chairman of the governing board. (q) ensure that members of the governing board can place agenda item during their meeting. (r) be responsible for monitoring compliance with the code of conduct by the members of the governing board of the depository. (s) uphold a strong culture in the depository and promote the target culture from the top through behavior, actions and effective communication. (t) communicate the guiding principles for institution s target regulatory, compliance, risk and conduct culture. (u) endeavor that the depository put in place key elements related to culture such as: i. adequate training programs to help employees better understand expectations of behavior (for example, trainings on dilemmas); ii. mechanisms to measure and track in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and key management personnel shall at all point of time comply with all the internal policies of the depository including their code of conduct. If there is a conflict between the code of conduct policy of the depository with those provided by the Board, then the policy issued by the Board shall prevail. 2. Regulatory Compliances. Every director, committee member and key management personnel of the depository shall (a) ensure that the depository abides by all the applicable provisions of the Act, the Depositories Act, 1996 , rules and regulations framed thereunder and the circulars, directions or any other instructions issued by the Board from time to time; (b) ensure compliance at all levels so that the regulatory system does not suffer any breaches; (c) ensure that the depository takes steps commensurate to honour the time limit stipulated by Board for corrective action. 3. Disclosures of Beneficial Interest. All directors, committee members and key management personnel shall disclose to the governing board of depository, upon assuming office and during their tenure in office, whenever the following arises: (a) any fiduciary relationship of self and family members and directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consultation with other respective members of the governing board and committees; (g) ensure that all important agendas placed before the governing board of depository and committees are deliberated in a timely manner; (h) not support any decision in the meeting of the governing board of depository and the committees respectively which may adversely affect the interest of investors and shall report forthwith any such decision to the Board. 2. Role of the directors and committee members in the day to day functioning of the depository. (a) The directors and committee members shall not interfere in the day to day functioning of the depositories and shall limit their role to decision making on policy issues and to issues as the governing board of depository may decide. (b) The directors and committee members shall abstain from influencing the employees of the depositories in conducting their day to day activities. (c) The directors and committee members shall not be directly involved in the function of appointment and promotion of employees unless specifically so decided by the governing board of depository. 3. Avoidance of Conflict of Interest. (a) No Director or committee member of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the depository within the time and manner as may be specified by the Board from time to time. (c) Public interest directors shall identify important issues which may involve conflict of interest for the depository, or may have significant impact on the functioning of the depository, or may not be in the interest of securities market. The same shall be reported to the Board in a time bound manner as may be decided by the depository. (d) Public interest directors shall have regular oversight on regulatory requirements and observations of Board s inspection particularly on issues of governance standards, technology and cyber security and system audit and cyber security audit observations. (e) Public interest directors should be proactive in identifying any issues concerning functioning of the depository and report the same to the Board. Public interest directors should ensure all regulatory communication or letter from the Board are placed before governing board with comments/report of managing director. (f) Public interest directors shall put in place an evaluation mechanism to assess the performance of managing directors on a continuing basis in line with evaluation guidelines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fair and transparent manner. (f) promptly inform the Board of violations of the provisions of the Act, the Depositories Act, 1996 , rules, regulations, circulars, guidelines or any other directions by any of its issuer or issuer s agent. (g) take a proactive and responsible attitude towards safeguarding the interests of investors, integrity of depository s systems and the securities market. (h) endeavor for introduction of best business practices amongst itself and its members. (i) act in utmost good faith and shall avoid conflict of interest in the conduct of its functions. (j) not indulge in unfair competition, which is likely to harm the interests of any other Depository, their participants or investors or is likely to place them in a disadvantageous position while competing for or executing any assignment. (k) segregate roles and responsibilities of key management personnel within the depository including a. Clearly mapping legal and regulatory duties to the concerned position b. Defining delegation of powers to each position c. Assigning regulatory, risk management and compliance aspects to business and support teams (l) be responsible for the acts or omissions of its emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their experience and expertise to the depository and provide assistance in strategic planning and execution of decisions. iv. Regulatory compliances Every director of the depository shall: a) endeavour to ensure that the depository abides by all the provisions of the Securities and Exchange Board of India Act, 1992, Depositories Act, 1996, rules and regulations framed thereunder and the circulars, directions issued by the Board from time to time; b) endeavour compliance at all levels so that the regulatory system does not suffer any breaches; c) endeavour to ensure that the depository takes commensurate steps to honour the time limit prescribed by Board for corrective action; d) not support any decision in the meeting of the governing board which may adversely affect the interest of investors and shall report forthwith any such decision to the Board. v. General responsibility Every director of the depository shall: a) place priority for redressing investor grievances; b) endeavour to analyze and administer the depository issues with professional competence, fairness, impartiality, efficiency and effectiveness; c) submit the necessary disclosures/statement of holdings/dealings in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nel and interests of depository and investors. ii. Regulatory Oversight Committee For overseeing implementation of this Code, a regulatory oversight committee shall be constituted by every depository under the governing board. iii. General standards a) Directors and key management personnel shall endeavour to promote greater awareness and understanding of ethical responsibilities. b) Directors and key management personnel, in the conduct of their business shall observe high standards of commercial honour and just and equitable principles of trade. c) The conduct of directors and key management personnel in business life should be exemplary. d) Directors and key management personnel shall not use their position to give/get favours to/from the executive or administrative staff of the depository, suppliers of the depository, or any issuer company admitted to the depository. e) Directors and key management personnel shall not commit any act which will put the reputation of the depository, in jeopardy. f) Directors, committee members and key management personnel of the depository, shall comply with the provisions of all applicable law to the securities market. iv. Disclosure of dealings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any fiduciary relationship of self and family members and directorship/partnership of self and family members in any depository participant or registrar and transfer agent; b) shareholding, in cases where the shareholding of the director key management personnel, directly or through his family exceeds five percent in any listed company or in other entities related to the securities markets; c) any other business interests. viii. Role of the Chairman and directors in the day to day functioning of the depository a) The Chairman and directors shall not interfere in the day to day functioning of the depository and shall limit their role to decision making on policy issues and to issues as the governing board may decide. b) The Chairman and directors shall abstain from influencing the employees of the depository in conducting their day to day activities. c) The Chairman and directors shall not be directly involved in the function of appointment and promotion of employees unless specifically so decided by the governing board. ix. Access to information a) Directors shall call for information only as part of specific committees or as may be authorised by the governing board. b) There shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board of violations of the provisions of the Act, Depositories Act, the rules, the regulations, circulars, guidelines or any other directions by any of its participants, issuer or issuer s agent. 5. A depository shall take a proactive and responsible attitude towards safeguarding the interests of investors, integrity of the depository system and the securities market. 6. A depository shall make endeavors for introduction of best business practices amongst itself and its participants. 7. A depository shall act in utmost good faith and shall avoid conflict of interest in the conduct of its functions. 8. A depository shall not indulge in unfair competition, which is likely to harm the interests of any other depository, participants or investors or is likely to place them in a disadvantageous position while competing for or executing any assignment. 9. A depository shall be responsible for the acts or omissions of its employees in respect of the conduct of its business. 10. A depository shall monitor the compliance of the rules and regulations by the participants and shall further ensure that their conduct is in a manner that will safeguard the interest of investors and the securi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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