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TMI BlogCode of Conduct for governing board, directors, committee members and key management personnelX X X X Extracts X X X X X X X X Extracts X X X X ..... work, covering risk appetite or risk tolerance policy of the stock exchange or clearing corporation and ensure that the policy contains the following:- i. role of risk appetite in key processes ii. clear quantitative metrics and thresholds to monitor performance of the stock exchange s or clearing corporation s risk appetite iii. acceptability of breaches and trigger response(s), if any. iv. zero tolerance for areas such as cyber security, system stability, surveillance, fair access, fraud or corruption, compliance, etc. g) make key stakeholders (executive and non-executive) aware of the use and value of risk appetite across the organization (including implications of breaches) and review and approve risk appetite metrics and thresholds periodically. h) ensure adequate independence of key functions such as regulatory and control functions (risk management, compliance and audit functions) such that; i. regulatory and control functions have sufficient stature to perform their tasks effectively. ii. regulatory and control functions operate independently and have appropriate direct access to the governing board of the stock exchange and clearing corporation and senior management. iii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through behaviour, actions and effective communication. t) communicate the guiding principles for institution s target regulatory, compliance, risk and conduct culture. u) endeavor that the stock exchange and clearing corporation 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 indicators related to culture at regular intervals; iii. accountability mechanisms; and iv. performance management mechanisms which take into account adherence to culture, conduct and behavior related dimensions. II. Code of Conduct for directors, committee members and key management personnel A. Applicable to directors, committee members and key management personnel of stock exchange and clearing corporation: 1. General Responsibility. Every director, committee members and key management personnel of the recognised stock exchanges or recognised clearing corporations shall (a) analyse and administer the stock exchanges and clearing corporations issues with professional competence, fairness, impartiality, efficiency and effectiveness; (b) su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll prevail. 2. Regulatory Compliances. Every director, committee member and key management personnel of the recognised stock exchange or recognised clearing corporation shall (a) ensure that the stock exchange or clearing corporation abides by all the applicable provisions of the Act, the Securities and Exchange Board of India Act, 1992, 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 stock exchange or clearing corporation 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 recognised stock exchange or recognised clearing corporation, upon assuming office and during their tenure in office, whenever the following arises: (a) any fiduciary relationship of self and family members and directorship or partnership of self and family members in any trading member or clearing member or depository participant or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation with other respective members of the governing board and committees; (g) ensure that all important agendas placed before the governing board of stock exchange and clearing corporation and committees are deliberated in a timely manner; (h) not support any decision in the meeting of the governing board of stock exchange and clearing corporation 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 recognised stock exchange and recognised clearing corporation. (a) The directors and committee members shall not interfere in the day to day functioning of the stock exchange or clearing corporations and shall limit their role to decision making on policy issues and to issues as the governing board of stock exchange and clearing corporation may decide. (b) The directors and committee members shall abstain from influencing the employees of the stock exchange and clearing corporations in conducting their day to day activities. (c) The directors and committee members shall not be directly involved in the function of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors (a) Public Interest Directors of the stock exchange and clearing corporations shall endeavor to attend all the governing board meetings and they shall be liable to vacate office if they remain absent for three consecutive meetings of the governing board or do not attend seventy-five percent of the total meetings of the governing board in a calendar year. (b) Public interest directors shall meet separately, at least once in six months to exchange views on critical issues. Public interest directors shall submit a report of such meeting to the Board and to the governing board of the recognised stock exchange and recognised clearing corporation 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 stock exchange and clearing corporation or may have significant impact on the functioning of the stock exchange and clearing corporation or may not be in the interest of securities market. The same shall be reported to the Board in a time bound manner. (d) Public interest directors shall have regular oversight on observations of Board s inspection particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-clearance from the compliance officer to waive this condition after recording in writing his satisfaction in this regard. Explanation. - securities for the purpose of this code shall not include mutual fund units. ] *************** 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 - B [See regulation 26(2)] Code of Ethics for directors and key management personnel of stock exchanges or clearing corporations The 'Code of Ethics' for directors and key management personnel of the recognised stock exchanges or recognised clearing corporations, is aimed at improving the professional and ethical standards in the functioning of recognised stock exchanges or recognised clearing corporations thereby creating better investor confidence in the integrity of the securities market. 1. Objectives and underlying principles. The Code of Ethics for directors and key management personnel of the recognised stock exchange or recognised clearing corporation seeks to establish a minimum level of business/ profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnel of the recognised stock exchange or recognised clearing corporation shall disclose on a periodic basis as determined by the recognized stock exchange or recognised clearing corporation (which could be monthly), all their dealings in securities, directly or indirectly, to the governing board/ regulatory oversight committee/ Compliance Officer. (b) The dealings in securities shall also be subject to trading restrictions for securities about which key management personnel in the recognised stock exchange or recognised clearing corporation may have unpublished price sensitive information. Requirement laid down under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 shall be referred in this regard. (c) All transactions must be of an investment nature and not speculative in nature. Towards this end, all securities purchased must be held for a minimum period of sixty days before they are sold. However, in specific/exceptional circumstances, sale can be effected anytime by obtaining pre-clearance from the Compliance Officer to waive this condition after recording in writing his satisfaction in this regard. Explanation.- securities for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision making on policy issues and to issues as the governing board may decide. (b) The Chairperson and directors shall abstain from influencing the employees of the recognised stock exchange or recognised clearing corporation in conducting their day to day activities. (c) The Chairperson and directors shall not be directly involved in the function of appointment and promotion of employees unless specifically so decided by the governing board. 9. 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 be prescribed channels through which information shall move and further there shall be audit trail of the same. Any retrieval of confidential documents/ information shall be properly recorded. (c) All such information, especially which is non-public and price sensitive, shall be kept confidential and not be used for any personal consideration/ gain. (d) Any information relating to the business/operations of the recognised stock exchange or recognised clearing corporation, which may come to the knowledge of directors/ key management personnel during performance of their duties ..... X X X X Extracts X X X X X X X X Extracts X X X X
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