The International Financial Services Centres Authority (“IFSCA”), in exercise of powers conferred under Section 12 and Section 13 of the International Financial Services Centres Authority Act, 2019, read with Regulation 24(2)(g), Regulation 24(2)(h) and Regulation 72 of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021 (“MII Regulations”), vide Circular No. IFSCA/CMD-DMIIT/PID-MII/2025-26/001,[1] dated October 13, 2025, detailed the guidelines on the governance of Market Infrastructure Institutions (“MIIs”), specifically regarding the appointment, reappointment, and performance review of Public Interest Directors (“PIDs”) on the Governing Boards of MIIs. These provisions aim to ensure transparency, accountability, and competence in the governance structure of MIIs under the jurisdiction of the International Financial Services Centres (IFSCs).
Key Highlights:
1. Composition of the Governing Board:
- Qualifications & Experience: The Governing Board must include directors with expertise in capital markets, finance and accountancy, legal and regulatory practice, technology, and risk management.
- PID Representation: At least 1 (one) PID must have experience in each of the following areas: (i) Capital markets; (ii) Finance and accountancy; (iii) Legal and regulatory practice; (iv) Technology. Additional specialised expertise may also be appointed, if the same is found relevant to the MII’s functions.
2. Appointment Process of PIDs:
- The Nomination and Remuneration Committee (“NRC”) is responsible for identifying at least 2 (two) candidates for each PID vacancy, ensuring they meet the eligibility criteria.
- After evaluating candidates based on their profile, the NRC recommends their names to the Governing Board and the Governing Board must independently assess the candidates, possibly seeking additional information.
- The final list of shortlisted candidates is submitted to the IFSCA for approval.
- In case of non-approval, the IFSCA may ask for alternative candidates or nominate one directly.
3. Reappointment of PIDs:
- The MII must submit an application for reappointment at least 2 (two) months before the current PID’s term expires.
- Reappointment applications must include:
- Diversity of experience in required domains.
- Performance review results from the NRC.
- Participation in the MII’s internal committees and board meetings.
- If reappointment is not immediately approved, the existing PID can serve for up to 3 (three) additional months or until a new PID is appointed.
4. Performance Review of PIDs:
- The MII must establish a performance review policy for PIDs, ensuring a fair and comprehensive evaluation of their contributions.
- Evaluation criteria should cover:
- Prior responsibilities as a PID.
- Domain-specific expertise.
- Overall skillset, competencies and attributes.
- The Governing Board must approve the review policy.
5. Training and Knowledge Upgradation:
- MIIs are encouraged to organize training programs for PIDs, focusing on areas such as capital markets, technology, and regulatory duties.
- MIIs are required to provide annual training for all PIDs to ensure continuous development and awareness.
[1]https://ifsca.gov.in/CommonDirect/GetFileView?id=47a297ad49aaae8fa365313a910091e6&fileName=Governing_Board_of_the_Market_Infrastructure_Institutions_20251013_0129.pdf