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Market institutions should follow governance norms in spirit, not just letter: JN Gupta

The co-location lapses at NSE was just one of the reasons for the tweaks to the governance norms for market infrastructure institutions (MIIs), said Gupta, who was part of the SEBI advisory committee on MII reforms

December 30, 2022 / 05:30 PM IST
(An exchange is not a purely commercial entity, it has to function as a frontline regulator, a utility (public goods) and a regulated entity, said SES' MD and founder JN Gupta. (Illustration by Suneesh Kalarickal)

(An exchange is not a purely commercial entity, it has to function as a frontline regulator, a utility (public goods) and a regulated entity, said SES' MD and founder JN Gupta. (Illustration by Suneesh Kalarickal)

The Securities and Exchange Board of India (Sebi) recently announced changes to the rules for market infrastructure institutions (MIIs) to improve governance standards.

The MIIs include entities that make up the backbone or infrastructure of the market, such as exchanges, depositories, clearing houses and share-transfer agents. The co-location server controversy and hiring lapses at the National Stock Exchange (NSE) may have been a contributing factor to the development, according to industry sources.

“That was not the only trigger,” says JN Gupta, who was also part of the committee that advised the market regulator on the MII reforms, in an interview to Moneycontrol.

Also read: Sebi proposes regulatory framework for index providers