Market Infrastructure Institutions

Market Infrastructure Institutions Latest News

The SEBI recently proposed extending the IT and cybersecurity framework of Market Infrastructure Institutions (MIIs) to their subsidiaries to strengthen regulatory oversight.

About Market Infrastructure Institutions 

• A MII is a financial entity that provides essential infrastructure for running the daily operations in the Stock Market/Capital Markets. 
• The MII primarily consists of the following 3 entities from the stock market: 
  • Stock Exchanges (including Commodity Exchanges) 
  • Clearing House/Clearing Corporation 
  • Depository Organization 
• The MIIs help to efficiently trade the financial securities, which in turn helps in the economic growth of the country. 
• These entities provide platforms and mechanisms for trading, clearing, settlement, record keeping, storage of securities, etc. 
• Any disruption in the operations of these institutions can adversely impact the functioning of the entire financial system. 
• The MIIs are separate corporate entities that are in the business to earn a profit for their services.
• Their role is critical in maintaining investor confidence, reducing systemic risk, and enabling smooth capital market operations. 
• They are uniquely empowered by law to regulate their members, including listed companies, Trading Members, Clearing Members, and Depository Participants. 
• MIIs must balance their role as public utilities and first-line regulators, operating efficiently and competitively as profit-driven entities. 
• Since MIIs are also the first-line regulators in the market, they have to follow strong corporate governance standards. 
• The Securities and Exchange Board of India (SEBI) is the main regulatory body for the capital markets in India. 
  • So, every MII in the stock market has to be registered with SEBI. 
  • The regulatory guidelines primarily include responsibilities for safeguarding the interests of the investors.

News: TH

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