BENGALURU (Reuters) – India’s markets regulator on Friday proposed stricter hiring rules for top jobs at securities-focused institutions such as stock exchanges, clearing firms and depositories, including consulting with an outside agency during the search for candidates.
The Securities and Exchange Board of India (SEBI) consultation paper proposed that these market infrastructure institutions (MIIs) should collaborate with an independent third-party agency to identify and recommend suitable candidates for senior positions such as director of compliance, chief risk officer and chief technology officer.
The regulator said the external agency must submit its recommendations to the institutions, although the final decision would rest with its board of directors, after considering SEBI’s comments on the candidates.
While SEBI selects and approves the appointment of CEOs of MIIs, key roles such as CO, CTO and CRO are appointed by the institution’s nomination committee.
The regulator said that given the importance of MIIs, it was important for key personnel to operate independently of short-term commercial considerations and therefore flagged the need for stricter regulations.
SEBI proposed that reappointment and dismissal of key personnel be based on the recommendation of the MII nomination committee, with the final nod coming from the board after a regulatory review.
The regulator also proposed that the MII prescribe a minimum “cooling off” period for senior staff and key directors before joining a competing institution.
SEBI has sought public comments on the proposals by December 12.
(Reporting by Nishit Navin in Bengaluru; Editing by Anil D’Silva)