SEBI on 22nd August, 2023 has issued the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Third Amendment) Regulations, 2023. The following ‘fit and proper person’ criteria shall apply to the applicant, recognised stock exchange, recognised clearing corporation, its shareholders, directors and key management personnel at all times:
- Such a person has a general reputation and record of fairness and integrity, including but not limited to –
(i) Financial integrity;
(ii) Good reputation and character; and
(iii) Honesty;
(b) Such a person has not incurred any of the following disqualifications —
(i) Conviction of the person by a court for any economic offence or an offence of the securities laws;
(ii) An Order for winding up has been passed against the person;
(iii) The person has been declared insolvent and has not been discharged;
(iv) An Order; restraining, prohibiting or debarring the person, from dealing in securities or from accessing the securities market, has been passed by the Board and a period of three years from the date of the expiry of the period specified in the Order has not elapsed;
(v) Any other Order against the person which has a bearing on the securities market, has been passed by the Board and a period of three years from the date of the Order has not elapsed:
(vi) The Board has initiated recovery proceedings under the Act or the Securities and Exchange
Board of India Act, 1992 (15 of 1992) that are pending;
(vii) The person is not financially sound or has been categorized as a wilful defaulter; and
(viii) Any other disqualification as may be specified by the Board from time to time.
If any director or key management personnel of a recognised stock exchange or recognised clearing corporation is not deemed to be fit and proper, the recognized stock exchange or recognized clearing corporation shall replace such a person within thirty days from the date of such disqualification, failing which the fit and proper person criteria may be invoked against the recognized stock exchange or recognized clearing corporation.
