ArdorComm Media Group

Monday, July 7, 2025 4:52 AM

Compliance

Sebi Proposes Stricter Governance for Stock Exchanges, Clearing Corporations, and Depositories

In a move aimed at reinforcing accountability and public-interest orientation within key market institutions, the Securities and Exchange Board of India (Sebi) has introduced a set of proposals to tighten governance norms for stock exchanges, clearing corporations, and depositories. Outlined in a consultation paper released on Tuesday, the proposed reforms focus on strengthening the oversight of Market Infrastructure Institutions (MIIs), which have witnessed a significant rise in trading volumes, investor participation, and profitability in recent years. Sebi emphasized that while MIIs have evolved into financially robust entities, their public-interest responsibilities must be prioritized over commercial gains. The key suggestions cover three broad areas: Mandatory Executive Directors: Sebi has proposed the compulsory appointment of at least two executive directors (EDs) on the boards of MIIs. These directors would be responsible for critical functions including trading operations, clearing and settlement, compliance, risk oversight, and investor grievance management. They would be designated as key management personnel (KMPs), with authority on par with the managing director (MD). Institutions can optionally appoint a third ED to focus on business development. Defined Roles for Key Officers: The regulator aims to formally codify the duties of the MD, EDs, and other senior officers such as the chief technology officer (CTO) and chief information security officer (CISO). At present, these responsibilities are either informally assigned or spread across departments, leading to potential governance gaps. Restrictions on Board Memberships: To avoid conflicts of interest and strengthen focus, Sebi proposes that MDs of MIIs should not serve on boards of any commercial entities, barring unlisted government-owned organizations involved in non-commercial activities. EDs would be restricted to board positions only within MII subsidiaries. This approach aligns with similar governance rules applied in the banking sector. Legal experts have weighed in on the potential impact of these recommendations. Diviay Chadha, Partner at Singhania & Co., said the proposals underline the need for fixed accountability within MIIs, especially given the rapid increase in retail investors. He added that the institutions would likely need to revise their corporate governance structures and charter documents to meet the new standards. However, some industry observers raised concerns about possible unintended consequences. Akshaya Bhansali, Partner at Mindspright Legal, noted that while the move to restrict EDs from serving on unrelated boards is intended to ensure accountability, it may inadvertently reduce the pool of experienced independent directors available to other listed companies. These recommendations arrive at a pivotal juncture as Sebi continues its evaluation of the National Stock Exchange’s (NSE) pending IPO, originally proposed in 2016. In its February communication with NSE, Sebi reiterated the need for a deep-rooted culture of prioritizing public interest over profits at the operational level. Bhansali clarified that although these proposed governance norms are not specifically targeted at NSE, they could become informal benchmarks or implicit prerequisites for regulatory approvals if not explicitly decoupled from the IPO review process. Sebi has invited stakeholders and the public to submit feedback on the proposals by 15 July 2025. Source: Mint

Sebi Proposes Stricter Governance for Stock Exchanges, Clearing Corporations, and Depositories Read More »

MAICSA Launches Third Annual YGP Award to Cultivate Future Governance Leaders

MAICSA has launched the third edition of its Young Governance Professionals (YGP) Award 2025, continuing its mission to empower final-year BCA students from universities such as TARUMT, UPTM, UiTM, USIM, and PBS. This prestigious annual competition fosters corporate governance expertise through case studies, expert mentorship, and real-world compliance challenges. Kicking off its preliminary rounds in March, the YGP Award 2025 underscores MAICSA’s dedication to shaping future governance leaders. MAICSA President, Dato’ Akbar bin Moidunny, highlighted the competition’s role in preparing students for the workforce, while Chief Judge Simon Yeoh emphasized its focus on integrity, accountability, and resilience. Hands-On Learning & Expert Guidance Participants will analyze corporate governance issues, applying key regulations such as: ✔ Corporate Governance Code 2021 ✔ Bursa Malaysia’s Listing Rules ✔ Companies Act 2016 This practical, problem-solving approach enhances their ability to navigate compliance challenges in real-world scenarios. Panel of Distinguished Judges The competition will be judged by three esteemed industry experts: Simon Yeoh (Chief Judge) Anil Joshi Hari Chand (Securities Commission) Datuk Petrus Gimbad (Inland Revenue Board Malaysia) These professionals will mentor participants through discussions, offering insights into corporate regulations and sustainable governance practices. Internship Opportunities & Industry Exposure Beyond the YGP Award, MAICSA strengthens its ties with universities by facilitating internships at corporate secretarial firms. These internships provide students with: Hands-on industry experience Practical governance skills A deeper understanding of corporate administration Through this initiative, MAICSA continues to bridge the gap between academic learning and professional practice, ensuring that young professionals are well-equipped for careers in governance and compliance. Source: Business Today

MAICSA Launches Third Annual YGP Award to Cultivate Future Governance Leaders Read More »

Zomato and Swiggy Deny Antitrust Violations Amidst CCI Investigation Claims

In response to recent media reports suggesting antitrust violations, food delivery giants Zomato and Swiggy denied any wrongdoing, labeling the claims “misleading.” The reports indicated that the Competition Commission of India (CCI) had initiated an investigation into the business practices of both companies. In a statement to the Bombay Stock Exchange (BSE), Zomato clarified that while the CCI began a preliminary inquiry in April 2022, no final findings or penalties had been issued. According to Zomato, the investigation followed a CCI “Prima Facie Order” from April 2022 that raised concerns regarding platform practices, such as preferential listings of restaurant partners and price parity requirements across platforms. Zomato’s Company Secretary, Sandhya Sethia, emphasized that these practices are in compliance with the Competition Act of 2002 and do not disrupt market competition. Swiggy echoed a similar sentiment, calling the media reports “misleading” and clarifying that the CCI’s inquiry is still in a preliminary stage. Swiggy, which filed details of the investigation in its September 2024 DRHP (Draft Red Herring Prospectus), emphasized that no conclusions have been drawn. The CCI’s Director General is still examining aspects of Swiggy’s operations, including business conduct, and Swiggy expects to submit further responses before a final decision is made. Both companies reaffirmed their dedication to transparency and regulatory compliance. Zomato assured stakeholders that there have been “no further reportable events” since the preliminary inquiry began, while Swiggy pointed out that the investigative process has yet to yield any determinations or actionable orders. This scrutiny follows a 2022 complaint by the National Restaurant Association of India, which alleged that Zomato and Swiggy’s practices restricted competition by requiring price parity from restaurants, impacting both restaurant margins and competitive market conditions. As Swiggy nears the close of its $1.4 billion IPO bids, both companies await further developments from the CCI’s review. Source: Business Standard Photo Credit: Business Standard

Zomato and Swiggy Deny Antitrust Violations Amidst CCI Investigation Claims Read More »

 SEBI Levels Playing Field for FVCIs with New Governance Norms

The Securities and Exchange Board of India (SEBI) has issued new norms that bring foreign venture capital investors (FVCIs) under the same regulatory framework as foreign portfolio investors (FPIs). This move marks a significant overhaul of the registration and governance framework for FVCIs, aiming to establish greater parity between the two investor categories. Under the updated norms, effective from January 1, 2025, FVCIs will be required to delegate their registration and governance processes to designated depository participants (DDPs), aligning with the current requirements for FPIs. The amendments also mandate FVCIs to disclose details of beneficial ownership under the Prevention of Money Laundering Act, enhancing transparency and compliance. Key changes include revisions to registration and eligibility criteria, application requirements, the rationalization of registration costs, and the introduction of a renewal fee. Previously, SEBI managed the registration and due diligence processes directly, but these responsibilities will now be handed over to DDPs. This change reflects SEBI’s broader strategy to reduce its direct involvement in the day-to-day operations of intermediaries, allowing the regulator to concentrate more on policy-making and regulatory oversight. Gazal Rawal, Partner at Cyril Amarchand Mangaldas, noted that while the changes may increase compliance burdens for DDPs amid ongoing regulatory adjustments, they will ultimately enhance governance and transparency. She added that the application process for FVCIs is expected to be streamlined in the future, similar to FPIs, with registration, PAN allotment, and KYC for bank and dematerialized accounts to be managed through a common form. Legal experts see these reforms as an effort to replicate SEBI’s success in delegating responsibilities to DDPs for FPIs. “New concepts like notifying the DDP of material changes, renewal of registration, and the imposition of late fees for renewal have been introduced for FVCIs. This move aligns SEBI’s approach to reduce its direct operational involvement with intermediaries,” said Ritul Sarraf of Nishith Desai Associates. Interestingly, restrictions under Press Note 3 on foreign direct investment from land-bordering countries and additional disclosure requirements for FPIs do not appear to apply to FVCIs, signaling nuanced regulatory considerations. The updated norms come after a year-long consultative process, providing stakeholders ample time to adapt. In 2023-24, 28 new FVCIs were registered, bringing the total to 279 as of March 2024, with investments increasing by 12% year-on-year to Rs 53,922 crore, predominantly in the information technology sector. SEBI’s revamped framework is expected to streamline processes, enhance transparency, and bring FVCIs and FPIs onto an equal regulatory footing, reinforcing India’s commitment to a robust and transparent investment ecosystem. Source: Business Standard  

 SEBI Levels Playing Field for FVCIs with New Governance Norms Read More »

Tamil Nadu Government Set to Release Draft of State Education Policy After Model Code of Conduct is Lifted

The Tamil Nadu government is poised to release the draft of the State Education Policy after the Model Code of Conduct (MCC) is lifted, according to sources. The MCC is expected to be lifted after the announcement of Lok Sabha election results on June 4. In 2021, the Tamil Nadu government announced its intention to introduce an exclusive State Education Policy during the Assembly session. A panel, headed by retired High Court judge Justice D Murugesan, was constituted in May 2022 to oversee this initiative, comprising educationists and experts from various fields. Sources within the Tamil Nadu Education Department revealed that the draft of the State Education Policy was already prepared in November 2023. However, the process faced delays due to unforeseen circumstances, including the resignation of the state minister for higher education, K Ponmudi, following a conviction in a legal case. Although the minister was reinstated following a favorable court order, the implementation of the Model Code of Conduct ahead of Lok Sabha polls halted the release of the draft. Officials from the school education department indicated that after the release of the draft policy, the final document would take over three months to be finalized and implemented. Dr. Mohammed Rashid, a retired professor from Madras University, emphasized the urgency of releasing the State Education Policy, particularly after the announcement of the National Education Policy. Educational institutions’ management has been anticipating the new policy for some time, he noted, underlining the importance of expediting its release to address evolving educational needs effectively.  

Tamil Nadu Government Set to Release Draft of State Education Policy After Model Code of Conduct is Lifted Read More »

Tamil Nadu School Education Department Warns Against Summer Special Classes Due to Heat Wave

The Tamil Nadu School Education Department has issued a stern warning to schools, cautioning them against conducting special classes during the summer vacation period. This directive comes in response to the prevailing intense heat wave conditions across the state, exacerbated by the onset of the peak summer period known as Agni Nakshatram, expected to extend until May 28. In an official statement, the School Education Department underscored the importance of exercising caution amidst the scorching heat, advising against the organization of special classes during this period. Schools are explicitly prohibited from conducting such sessions, with the department asserting its intent to take strict action against any violations of this directive. Moreover, the department has instructed district education officers to conduct thorough investigations to ensure compliance with the order, signaling a proactive approach towards enforcement. Tamil Nadu School Education Minister Anbil Mahesh Poyyamozhi reiterated the department’s stance, emphasizing that stringent measures would be implemented against any school found to be in breach of the prohibition on conducting special classes during the summer vacation. This proactive measure aims to safeguard the well-being of students and educators alike, recognizing the adverse effects of prolonged exposure to extreme heat conditions. By discouraging special classes during this period, the department prioritizes the health and safety of the educational community, aligning with its commitment to promoting a conducive learning environment while addressing environmental challenges.  

Tamil Nadu School Education Department Warns Against Summer Special Classes Due to Heat Wave Read More »