SEBI Opts Against Prescribing A Cooling-Off Period For Public Interest Directors In MIIs

The Securities and Exchange Board of India (SEBI) has decided not to prescribe a cooling-off period for public interest directors (PIDs) transitioning between market infrastructure institutions (MIIs) to improve the ease of doing business. The existing appointment process for PIDs, which requires SEBI’s prior approval but not shareholder approval, will continue.

MIIs may determine a minimum cooling-off period for key managerial personnel and directors before they join a competing MII. If a governing board chooses not to reappoint a PID after the first term, it must document and communicate the rationale to SEBI. Additionally, the appointment, reappointment, or termination of key personnel in critical operations, regulatory compliance, risk management, and investor grievances will now require approval from the MII’s Governing Board instead of its Nomination and Remuneration Committee.