**Executive Summary**
This circular, issued by the International Financial Services Centres Authority (IFSCA) on October 13, 2025, pertains to the governance of Market Infrastructure Institutions (MIIs) within the International Financial Services Centres (IFSC). It specifies requirements for the appointment of directors on the Governing Board of the MII, including Public Interest Directors (PIDs), and the standard or mechanism for performance review of the Public Interest Directors (PIDs). The circular comes into effect immediately.
**Key Points / Main Content**
* **Composition of the Governing Board of the MII:**
* Directors must have qualifications and experience in capital markets, finance, accountancy, legal and regulatory practice, technology, risk management, or administration.
* The board must include at least one PID with expertise in capital markets, finance and accountancy, legal and regulatory practice, and technology.
* **Appointment Process of PIDs:**
* The Nomination and Remuneration Committee (NRC) must identify at least two candidates for each PID vacancy, considering eligibility criteria.
* Written consent is required from all candidates before shortlisting.
* The NRC assesses candidates' suitability based on profile, background, and experience.
* The Governing Board independently assesses candidates from the NRC and may seek more information.
* If candidates don't meet the board's criteria, the NRC must recommend another candidate until at least two are shortlisted.
* The MII submits the shortlisted candidates' names and profiles to the Authority for approval.
* For vacancies due to term expiry, the MII must apply to the Authority at least two months prior.
* The Authority may select a shortlisted candidate or, if unsatisfied, instruct the MII to submit alternate candidates or nominate a person itself.
* MIIs must obtain additional information and documents from the selected PID, as specified in Annexure-1, and submit them to the Authority for approval.
* **Reappointment of a PID:**
* The MII must apply to the Authority for reappointment at least two months before the PID's term expires.
* Reappointment applications must consider diversity of experience, experience in participating in the Governing Board, and performance review by the NRC.
* The application must also include information on the PID's participation in internal committees and the Governing Board.
* Existing PIDs may continue for a maximum of three months after their term expires (or until a new PID is appointed) if the board meets regulatory requirements.
* **Performance Review of PIDs:**
* MIIs must create a performance review policy for PIDs, including criteria and a calculation methodology.
* The policy and any changes must be approved by the Governing Board.
* Performance reviews must be comprehensive and objective, considering prior responsibilities, domain expertise, skillsets, and personal attributes.
* **Knowledge Upgradation of PIDs:**
* MIIs may organize training programs in areas such as capital markets, technology, and regulatory responsibilities.
* MIIs must provide adequate training to all PIDs annually.
**Impact Analysis**
**Stakeholder**: Market Infrastructure Institutions (MIIs)
**Impact**:
* Must adhere to specified composition requirements for their Governing Boards, including the qualifications and experience of directors and PIDs.
* Must follow the defined appointment process for PIDs, including candidate identification, assessment, and submission to the Authority for approval.
* Must comply with the requirements for PID reappointment, including application timelines and required documentation.
* Must develop and implement a performance review policy for PIDs.
* Must organize training programs and provide adequate annual training to PIDs.
**Action Required**:
* Review and update internal policies and procedures to ensure compliance with the circular's requirements.
* Implement the specified process for appointing and reappointing PIDs.
* Develop a performance review policy for PIDs that meets the defined criteria.
* Organize appropriate training programs for PIDs to enhance their knowledge and skills.
* MIIs must obtain additional information and documents as specified in Annexure-1 from the selected PID, and submit them to the Authority for approval.
Key Entities Referenced
Market Infrastructure Institutions (MIIs): Entities in the International Financial Services Centres (IFSC) governed by these regulations
International Financial Services Centres Authority (IFSCA): The regulatory authority issuing the circular and responsible for overseeing the Market Infrastructure Institutions in IFSC
International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021: The core regulatory framework governing the MIIs, referred to as "MII Regulations"
Governing Board of the MII: The board of directors overseeing the Market Infrastructure Institution
Public Interest Directors (PIDs): Directors on the Governing Board whose appointment and performance review is a key focus of the circular
CIRCULAR
IFSCA/CMD-DMIIT/PID-MII/2025-26/001 October 13 2025
To,
All the Market Infrastructure Institutions in the International Financial Services
Centres (IFSC)
Dear Sir/Madam,
Sub: Governing Board of the Market Infrastructure Institutions (MIIs)
A. Reference is drawn to the International Financial Services Centres Authority (Market
Infrastructure Institutions) Regulations, 2021 (“MII Regulations”), in particular
Chapter III, which inter alia specifies the governance norms for the MIIs.
B. Clause (g) and (h) of sub-regulation (2) of regulation 24 of the MII Regulations, inter
alia, requires the International Financial Services Centres Authority (“the Authority”)
to specify:
(i) the requirements to be fulfilled for appointment of directors on the
Governing Board of the MII;
(ii) the standard or mechanism for performance review of the Public Interest
Directors (PIDs).
1 | Pa geC. In pursuance of the above regulations, the Authority hereby specifies as under:
Composition of the Governing Board of the MII
____________________________________________________________________________________________
1. The directors of the Governing Board of the MII shall have the following
qualifications and experience:
(i) The Governing Board shall consist of directors having the requisite
qualifications and experience in the areas of capital markets, finance and
accountancy, legal and regulatory practice, technology, risk management or
administration.
(ii) The Governing Board shall consist of at least one PID having the requisite
qualification and experience in each of the areas of:
a) capital markets;
b) finance and accountancy;
c) legal and regulatory practice; and
d) technology.
Provided that the MII may also appoint directors having qualifications and
experience in other specialised areas which may be relevant to their
functioning.
Appointment process of PIDs
2. The process for appointment of PIDs shall be as under:
a) The Nomination and Remuneration Committee (NRC) shall identify at least two
candidates for each vacancy of a PID, considering the eligibility criteria and other
factors stipulated herein:
Provided that prior consent in writing shall be obtained from all the candidates
before shortlisting them.
2 | Pa geb) The NRC shall assess the suitability of the candidates based on their profile, inter
alia, including educational background, work experience and accordingly
recommend their names to the Governing Board.
c) The Governing Board shall carry out an independent assessment of the candidates
based on the information provided by the NRC, and may seek additional
information, if required.
d) In the event the candidates recommended by the NRC are unable to meet the
independent assessment criteria of the Governing Board, the Governing Board
shall instruct the NRC to recommend another candidate, till the time at least two
candidates are shortlisted by it.
e) The names along with brief profile of all the candidates shortlisted by the
Governing Board shall be submitted by the MII to the Authority for its approval.
Explanation I.- It is hereby clarified that in case the requirement of appointment of
new PID arises due to the office falling vacant upon expiry of the term, an
application for appointment of a new PID shall be submitted by the MII to the
Authority, at least two months prior to such vacancy falling due.
Explanation II.- In case the position falls vacant due to any exigency, the competent
authority may consider such application for appointment of a new PID.
f) The Authority may select one of the shortlisted candidates for appointment as PID
on the Governing Board of the MII.
g) In the event the Authority is not satisfied with the names proposed by the MII, the
Authority may either instruct the MII to shortlist and submit names of alternate
candidates, or the Authority itself may nominate a person as a PID on the
Governing Board of the MII, in accordance with sub-regulation (2A) of regulation
24 of the MII Regulations.
3 | Pa geh) The MIIs shall obtain such additional information and documents as specified in
Annexure-1 from the person selected for appointment as PID, and shall submit
the same to the Authority for its approval.
Explanation.- For the purpose of this Clause, it is hereby clarified that for appointment
of PIDs, the MIIs shall not be required to obtain approval of its shareholders.
Reappointment of a PID
3. In the case of reappointment of an existing PID, the MII shall make an application
to the Authority at least two months prior to the expiry of the term of such PID:
Explanation. - Application for reappointment of existing PID shall be submitted
after due consideration of the following:
(i) the diversity of experience in the areas specified under Clause 1 (i) &(ii) of
this Circular and experience in participating in the Governing Board; and
(ii) performance review conducted by the NRC, in accordance with Clause 6 of
this Circular.
4. Additionally, such an application for reappointment shall be accompanied with
information pertaining to the participation of the PID in the meetings of various
internal Committees, the Governing Board, and any other information as may be
required by the Authority.
5. The existing PID, may continue to hold office for a maximum period of three
months from the date of expiry of their term or till a new PID is appointed,
whichever is earlier, only if the Governing Board does not meet the mandatory
regulatory requirements in relation to its constitution as specified under clause
(b) of sub-regulation (2) of regulation 24.
4 | Pa gePerformance review of PIDs
6. (1) The MII shall frame the performance review policy for the PIDs ensuring the
following:
(i) The policy shall, inter alia, include criteria and calculation methodology
for such an evaluation.
(ii) The policy and any changes made therein shall be approved by the
Governing Board.
(2) A comprehensive and objective approach shall be adopted while undertaking
performance review of PIDs, which shall, inter alia, include:
a) Prior responsibilities as a PID;
b) Domain expertise/experience in technology/ law/ finance and accounts/
capital market/ other specialised areas;
c) Sufficient mix of skillsets on the Governing Board;
d) General competencies and personal attribute-related parameters.
Knowledge upgradation of PIDs
7. The MIIs, in coordination with reputed institutions, may organize training
programs in the areas of capital markets, technology, regulatory responsibilities,
or any other relevant areas for the PIDs.
8. The MIIs shall provide adequate training to all their PIDs, every year.
D. This Circular is issued in exercise of powers conferred under Section 12 and 13 of the
International Financial Services Centres Authority Act, 2019, read with clause (g) and
(h) of sub-regulation (2) of regulation 24 and regulation 72 of the MII Regulations,
and shall come into force with immediate effect.
5 | Pa geA copy of this Circular is available on the website of the International Financial
Services Centres Authority at www.ifsca.gov.in .
Yours faithfully,
Praveen Kamat
General Manager
Division of Market Infrastructure Institutions and Technology
Capital Markets Department
email: praveen.kamat@ifsca.gov.in
Tel: +91-79-61809820
6 | Pa geAnnexure-1
[refer sub-clause (h) of clause (2)]
Following additional information and documents to be obtained by the MII from the
person approved for appointment as PID on the Governing Board:
(a) Name;
(b) Address;
(c) Educational qualification;
(d) Details of employment/ Occupation, past and present;
(e) Details of other directorships;
(f) Director Identification Number;
(g) Declaration regarding fulfilment of the requirements specified under
regulation 23 of the MII Regulations;
(h) Declaration confirming compliance with the requirements specified under
regulation 24(2)(e)&(f) read with regulation 2 (1) (a) of the MII Regulations, in
respect of non-association with Broker Dealer or Clearing Member or Depository
Participant;
(i) Details of any regulatory action, pending or completed taken by any statutory
or regulatory authority against the person proposed to be appointed as directors;
(j) Details of activities which, in the opinion of the director, lead to his/her
disqualification;
(k) Association with Broker Dealers /Clearing Members/ Depository Participants
in IFSC;
(l) Disclosure of the names of his/her dependents, if any, associated with the
securities market in IFSC;
(m) An undertaking that he/she shall abide by the code of conduct as specified in
Part B of Schedule I of the MII Regulations;
(n)Consent letter for acting as a PID;
(o) Details of any criminal cases, pending or disposed off before any
judicial/quasi-judicial/adjudicatory body or tribunal.
7 | Pa ge