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Markets regulator SEBI on Tuesday revised its oversight framework for stock exchanges and other market infrastructure institutions (MIIs), defining the structure and responsibilities of various statutory committees to enhance governance.

These guidelines are on the recommendations of SEBI’s Committee on Strengthening Governance of MIIs, according to a circular issued by the market regulator.

Statutory committees of MIIs can be divided into different categories, such as functional, oversight and investment.

Functional committees are the Member Committee, Nomination and Remuneration Committee, Oversight Committees, Standing Committee on Technology Regulatory Oversight Committee, and Risk Management Committee and Investment Committee.

On the composition of panels, SEBI said such committees should include Key Management Personnel (KMP), Non-Independent Directors (NIDs), Independent External Professionals (IEPs), and Public Interest Directors (PIDs).

Each committee must be chaired by a PID with relevant expertise. Further, PIDs must form at least half of the committee members.

SEBI said voting on any resolution requires PID participation equal to or greater than other members combined.

“The voting on a resolution in the meetings of the statutory committees at MIIs shall be valid only when the number of PIDs that have cast their vote on such resolution is not less than the total number of other members put together, who have cast their vote on such resolution,” SEBI said.

Additionally, the regulator has put in place specific responsibilities and terms of reference for each committee.

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Further, functions or terms of reference of statutory committees cannot be delegated, except certain operational activities of the member committee (MC).

On compliance requirements, SEBI said that MIIs must have mandatory committees as required by relevant laws.

Public Interest Directors cannot serve on more than five statutory committees. Independent External Professionals should have integrity, a sound reputation, and no conflict of interest.

The new guidelines will come into force within 30 days of the issuance of the circular.