The country's largest stock exchange National Stock Exchange (NSE) has amended various rules governing its board and various committees, including the one on disciplinary actions.
The changes follow guidelines from Sebi last year on the exchanges' board composition and other matters, to which NSE had complied at that time and the same have been now incorporated in its rules, bylaws and article of association.
The amendments in rules, bylaws and Article of Association of NSE have been disclosed through three circulars dated May 6 from NSE's secretarial and the legal department and have come into effect from April 9.
As per one of the amendments, NSE's Disciplinary Action Committee can no longer delegate any of its powers to the Managing Director of the bourse.
As per a new clause, an 'Investor Services Committee' needs to be constituted to "supervise the working of the Investors' Services Cell of the Exchange and in suitable cases attend to grievances of the Investors personally."
The committee would need to have at least 80% of members from among non-trading members.
Besides, the bourse's defaulters' committee and disciplinary action committee would need to have at least 80% of the members from among non-trading members, as against a minimum requirement of 60% currently.
Also, NSE would no longer need prior aproval from Sebi on who should be nominated to these two committees.
The amendment has also been made to drop a clause, as per which the disciplinary action committee may delegate any of its powers to the Managing Director.
The changes also include substitution of the words 'Sebi directors' with 'Sebi nominee directors' and of 'public representative' with 'public interest directors' in connection with the composition of the NSE's board.
A new clause requires the board to consist of Public Interest Directors, Trading Member Directors, Shareholder Directors and Sebi nominated Directors as and when deemed fit.
"The Chief Executive shall be an ex-officio Director on the board," the amendment adds.
Also, Public Interest Directors (PIDs) shall constitute one-fourth of the board, and number of trading member directors would be capped at one-fourth of total strength.
The remaining members should be shareholder directors. Also, the NSE board would have to absorb directors nominated by Sebi by altering the strength of trading member directors, rather than shareholder directors.
The Sebi may nominate Directors on the board as and when deemed fit, one of the amendments said.
