Revamping Governance: SEBI's New Guidelines for Market Infrastructure Institutions

SEBI has issued new guidelines to bolster internal audit mechanisms at Market Infrastructure Institutions (MIIs), enhancing governance and transparency. MIIs must conduct annual internal audits across three operational verticals, involving independent auditors and audit committees to ensure compliance, efficiency, and financial stability.

The Securities and Exchange Board of India (SEBI) has unveiled a comprehensive set of internal audit guidelines for Market Infrastructure Institutions (MIIs), aimed at reinforcing governance structures and ensuring operational transparency. These enhancements mandate annual audits, focusing on accountability and adherence to high governance standards.

MIIs, which include stock exchanges, clearing corporations, and depositories, are required to engage independent audit firms to conduct audits and report findings directly to the audit committee. SEBI's guidelines detail the verticals under scrutiny, including operations, regulatory compliance, risk management, and business development.

The new framework, which will be enforced 90 days post-circular issuance, emphasizes standardizing audit procedures and mandates that key observations be analyzed and included in final reports. This move is expected to tighten oversight and improve transparency across MIIs, enhancing investor confidence in India's financial markets.

(With inputs from agencies.)