SEBI, vide its circular dated 5th August, 2025, has revised the mechanism for handling requests for review, appeal, or waiver of penalties imposed by Market Infrastructure Institutions (MIIs) such as stock exchanges, clearing corporations, and depositories. Earlier, all such requests were placed before the Member Committee (MC) for consideration. Now, SEBI has clarified that only appeals against actions taken by the Internal Committee (IC) of the MC or under a pre-approved regulatory policy will continue to be reviewed by the MC. However, appeals against actions taken directly by the MC itself must now be handled by a separate mechanism established by the Governing Board of the MII, comprising Public Interest Directors and/or independent external professionals who are not part of the MC. The Governing Board is also required to formulate a Standard Operating Procedure (SOP) for this process. These provisions will come into effect from the 45th day of the circular’s issuance, and MIIs must amend their internal rules and inform market participants accordingly.
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