Market Infrastructure Institutions (MIIs)

Market Infrastructure Institutions Latest News

To further strengthen the governance mechanism at market infrastructure institutions (MIIs), regulator SEBI recently released comprehensive guidelines for internal audit mechanisms at such establishments, along with the prescribed composition of the audit committee.

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 profitfor their services. 
• But these are also the first-line regulators in the market and 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.

Market Infrastructure Institutions FAQs

Q1: What is a market infrastructure institution?

Ans: A MII is a financial entity that provides essential infrastructure for running the daily operations in the Stock Market/Capital Markets. 

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Q2: What are the three key entities that make up the Market Infrastructure Institutions?

Ans: Stock Exchanges, Clearing Corporations, and Depository Organizations

Q3: Why is the proper functioning of MIIs crucial to the economy?

Ans: It ensures smooth capital market operations, aiding economic growth.

Source: ET