The 2012 Ownership and Governance Norms for Market Infrastructure Institutions ( SEs and Clearing Corps)

SEBI has acted on its decision before the MCX license to new norms for stock exchanges, classifying them as public institutions in the titling and requiring SEBI approval to function

The rules detail requirements apparently with an eye on the current enquiries facing NASDAQ but interoperability and automated trades are not a focus area in our exchanges despite the volumes ( except for real time quotes/and inter exchange settlement on BSE/NSE) Also india does not currently allo dark pools and after hour ECNs that require the complexity in regulation vs laissez faire arguments 

A suo moto Conflict Resolution Committee is also highlighted requiring interaction with surveillance, listing, trading and member regulation oversight committees.

Earlier SEBI also limited that FUTP violations cannot be settled by consent

Interoperability between multiple Clearing Corps or setting up of a single clearing house has been refered to an Expert committee

Banks will remain trading members on CDS for at least three years or till SCRA is amended

D&P regulations ill separately be announced

The regulations for SE and Clearing corp ask for recognisedi institutions to apply and details the requirements of the application(Form A, Form A – Clearing Corp)

The MII status has been defined in detail for each role. For being a stock exchange the minimum hygeine requirements detailed in the paperwork are:

(a) the applicant has the necessary infrastructure for orderly execution of trades;  

(b) the applicant has an online screen-based trading system;  

(c) the applicant has an online surveillance  capability which monitors positions, prices 

and volumes in real time so as to ensure market integrity; 

(d) the applicant has adequate infrastructure to list securities for trading on its platform, 

wherever applicable; 

(e) the applicant has necessary capability to have a nationwide network of trading 

members and has adequate facility to admit and regulate its members;  

(f) the applicant has made necessary arrangements to establish connectivity with its 

trading members and clearing corporation; 

(g) the applicant has adequate Investor Protection Fund and Investor Services Fund;  

(h) the applicant has adequate investor grievances redressal mechanism and arbitration 

mechanism to resolve disputes arising out of trades and its settlement;  

(i) the applicant has the facility to disseminate information about trades, quantities and 

quotes in real time to at least two information vending networks which are accessible 

to investors in the country; 

(j) the applicant has adequate systems’ capacity supported by a business continuity plan 

including a disaster recovery site; 

(k) the applicant has in its employment, sufficient number of persons having adequate 

professional and other relevant experience; 

(l) the business feasibility plan has been appraised by a reputed agency having expertise 

in securities market; and 

(m)any other conditions as may be specified by the Board.

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