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TMI BlogEase of Doing Business in the context of Standard Operating Procedure for payment of “Financial Disincentives” by Market Infrastructure Institutions (MIIs) as a result of Technical GlitchX X X X Extracts X X X X X X X X Extracts X X X X ..... BI Master Circular for Depositories dated October 06, 2023 , have specified the Standard Operating Procedure (SOP) for handling of technical glitches by Market Infrastructure Institutions (MIIs) and payment of Financial Disincentives thereof. The said SOP, inter-alia, has provision for automatic trigger of financial disincentive on the MII and individuals i.e. Managing Director (MD) and Chief Technology Officer (CTO) of the MII if predefined criteria in handling of technical glitches are not adhered to. 2. In this regard, SEBI received recommendations/ references to review imposition of Financial Disincentive on individuals from various fora like Committee on Strengthening Governance of Market Infrastructure Institutions , Working Group on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Master Circular for Stock Exchanges and Clearing Corporations dated October 16, 2023 , and Para 4.70.4 of SEBI Master Circular for Depositories dated October 06, 2023 , are modified as below: Considering the criticality of smooth functioning of systems of MIIs (as any disruption adversely impacts all classes of investors / market participants as well as the credibility of the securities market), specifying a pre-defined threshold for downtime of systems of MIIs becomes desirable. For any downtime or unavailability of services, beyond such pre-defined time, there is a need to ensure that Financial Disincentive is paid by the MIIs. This will encourage MIIs to constantly monitor the performance and efficiency of their systems and upgrade/ enh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive annual reports), the details of financial disincentive paid by them on account of technical glitches. Further, listed MIIs shall make appropriate disclosures required in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding any financial disincentive imposed by SEBI on account of technical glitch. 4.5. Further, the following text has been inserted post Clause 2.2 of Annexure XI of the aforesaid Master Circular for Stock Exchanges and Clearing Corporations and Clause 2.2 of para 4.70.5.A of the SEBI Master Circular for Depositories: 2.3 SEBI on identification of the Technical Glitch resulting into Financial Disincentive to the MIIs, or upon receipt of the information of any such instance shall prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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