SEBI has proposed easing director eligibility norms for Market Infrastructure Institutions (MIIs) to address talent shortages. The regulator is also mandating standardized qualification procedures for critical roles like CTOs and CISOs to improve operational resilience. Public feedback on these governance changes is open until September 30, 2026.
On September 9, 2026, the Securities and Exchange Board of India (SEBI) proposed significant changes to how directors are appointed at Market Infrastructure Institutions (MIIs). MIIs—which include stock exchanges, clearing corporations, and depositories—form the foundational layer of the Indian financial market. The regulator is aiming to resolve long-standing talent recruitment difficulties by easing strict eligibility rules that have previously disqualified many potential experts.
Currently, regulations prohibit individuals from joining the boards of these institutions if they have professional ties to trading members or brokers. SEBI has suggested expanding these exemptions to include candidates from firms with well-diversified shareholding. Under the proposed definition, a company would be considered well-diversified if no single entity, excluding state-owned shareholders, holds 10% or more of the voting rights. This shift is intended to widen the pool of available industry experts while maintaining necessary safeguards against conflicts of interest.
Beyond board appointments, the regulator is formalizing human capital standards for the technical and risk-management side of these institutions. SEBI has directed MIIs to draft standardized Standard Operating Procedures (SOPs) that explicitly define the required certifications, experience, and skill sets for four vital executive roles: Chief Technology Officer, Chief Information Security Officer, Compliance Officer, and Chief Risk Officer. By requiring governing boards to approve these SOPs in coordination with technical committees, SEBI aims to create uniform professional standards across the sector.
Operational stability is another focus of these proposals. To prevent leadership gaps, the regulator has suggested a mandatory three-month window to fill any vacancies in these key positions. MIIs are being encouraged to prioritize succession planning to ensure that the departure of key personnel does not disrupt daily operations.
For investors and market observers, these proposals signal a focus on long-term institutional resilience. While the relaxation of director rules is designed to bring in more diverse expertise, the challenge for MIIs will be to balance this with the need for strict independence, given their role as first-line regulators of the market. The success of these measures will depend on how effectively these institutions implement the new SOPs and manage their talent pipelines. The regulator is accepting public feedback on these governance frameworks until September 30, 2026.