Also, SEBI plans to establish local offices in major cities such as Chandigarh, Jaipur, Lucknow, Guwahati, Bhubaneswar, Vijayawada, Hyderabad, and Bengaluru to enhance regulatory reach, investor engagement, and monitoring of unregulated activities, with further expansion planned in subsequent phases.
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To strengthen governance at market infrastructure institutions (MIIs), while ensuring that they prioritise investor interest over commercial considerations, the Securities and Exchange Board of India has placed curbs on the power of stock exchange heads, with defined roles and responsibilities.
The SEBI board, which met on Friday, approved the appointment of two executive directors of appropriate stature and independence as heads of critical operations and regulatory, compliance and risk management, who would also serve on the governing board of the MII.
Dual role of EDs: governance and succession planning
These appointments also have the dual function of facilitating succession planning in the entities.
The EDs will report to the MD, while the nomination and remuneration committee will take inputs from the MD and the appropriate committee of the governing board, finalising appraisals of the EDs, whose appointments or removal will mirror the process followed for MDs.
Gap in MD–KMP hierarchy flagged by SEBI
“Strengthening of governance of MIIs is imperative in the wake of exponential growth of securities markets in recent years,” said SEBI. It pointed out that there was a significant gap in the stature and standing between the MD and key managerial persons of critical operations, while the overall roles and responsibilities of the MD and the specific KMPs are not currently prescribed under the regulations. There are no norms regarding the directorships of the MD in companies other than subsidiaries.
SEBI to set up local offices for stronger regulatory presence
Meanwhile, in order to improve regulatory reach and response, Sebi also plans to establish local offices in state capitals and other major cities in a phased manner.
In the first phase, the major cities where SEBI intends to establish local offices are Chandigarh, Jaipur, Lucknow, Guwahati, Bhubaneswar, Vijayawada, Hyderabad and Bengaluru. Other states and major cities would be considered in subsequent phases.
The proposed setting up of local offices would enable SEBI to enhance its connection with investors, intermediaries and issuers, particularly SMEs, start-ups, REITs, and non-profits, apart from improving its ability to monitor unregulated activities and gather market intelligence at the local level, it said.
Published on September 12, 2025
