SEBI has made a noteworthy decision to enhance the ease of doing business by eliminating the requirement for a cooling-off period for public interest directors (PIDs) transitioning from one Market Infrastructure Institution (MII) to another. The responsibility of appointing specific key managerial personnel in MIIs has now been shifted to the governing Board from the Nomination and Remuneration Committee.
While MIIs have the option to set a minimum cooling-off period for key managerial positions and directors before joining a competing MII, the governing board must now provide a rationale to SEBI if they choose not to re-appoint an existing PID after their first term. Additionally, the existing process for appointing PIDs, which does not require shareholder approval but does necessitate SEBI’s prior approval, will remain unchanged.
Furthermore, the appointment, re-appointment, or termination of specific Key Managerial Personnel in critical functions such as Operations, Compliance, Risk Management, and Investor Grievances will now require approval from the governing Board of the MII, a responsibility previously held by the Nomination and Remuneration Committee.
This decision, made during a SEBI Board meeting, offers relief to analysts who can now collect advance fees for up to one year, instead of the previous limit of three months. Overall, these changes aim to streamline processes and facilitate a more efficient business environment within the capital markets.
