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SEBI Cooling-Off Rule for MII Directors Moving to Rivals

13 May 20251 min read
BANKING & FINANCESEBI Cooling-OffRule for MIIDirectors Movingto Rivals13 May 2025safalsetu.com

Why in the news

In May 2025, SEBI made a cooling-off period compulsory for directors moving between competing market infrastructure institutions.

Key facts

  • Covered: non-independent directors and public interest directors.
  • MIIs: stock exchanges, clearing corporations and depositories.
  • Trigger: only a move to a competing institution.

Norms

Director typeRequirement
Non-independentCooling-off period first
Public interest3-year term at a rival, after SEBI’s prior approval

Purpose

  • Avoid conflicts of interest and undue influence.
  • Keep competing institutions separate and impartial.

Exam angle

  • Rule covers exchanges, clearing corporations, depositories.

Test yourself

1. Which institutions are classed as MIIs in the SEBI cooling-off amendment?

MIIs include stock exchanges, clearing corporations and depositories.

2. A public interest director can join a competing MII for how long, subject to SEBI's prior approval?

The term allowed is 3 years with prior approval.

3. When does SEBI's new cooling-off rule apply to directors?

It applies only on a move to a competing institution.