Market infrastructure Institutions (i.e. Stock Exchanges, Clearing Corporations and Depositories) are systemically important institutions for the development of the securities market.
Since any lapse in monitoring to detect and deter manipulative or abusive trading would show lacking adequate actions for surveillance related activity on the part of MIIs that may have an adverse effect on the investors’ trust and confidence in the securities market, it has been decided by SEBI, after consultation with MIIs, for MIIs to implement a framework for Surveillance Related Lapses at MIIs.
Framework of Financial Disincentives for Surveillance Related Lapses at MIIs:
Surveillance Related Lapses:
Surveillance Related Lapse (“SRL”), shall mean and include the following:
Any lapse observed in the implementation of decisions taken during the Surveillance Meetings including any non-implementation or partial implementation or delayed implementation of any decision or communication of SEBI relating to surveillance as per agreed scope and timelines.
Any lapse observed in discharge of surveillance activities as per agreed scope and timelines; and
Any inadequate reporting or non-reporting of surveillance related activity as per agreed timelines.
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