TMI BlogCODE OF CONDUCT FOR PARTICIPANTSX X X X Extracts X X X X X X X X Extracts X X X X ..... ebit instruction slip and in all the other activities undertaken by him on behalf of the beneficial owners. 5. A participant shall endeavour to resolve all the complaints against it or in respect of the activities carried out by it as quickly as possible, and not later than one month of receipt. 6. A participant shall not increase charges/fees for the services rendered without proper advance notice to the beneficial owners. 7. A participant shall not indulge in any unfair competition, which is likely to harm the interests of other participants or investors or is likely to place such other participants in a disadvantageous position while competing for or executing any assignment. 8. A participant shall not make any exaggerated statement whether oral or written to the clients either about its qualifications or capability to render certain services or about its achievements in regard to services rendered to other clients. 9. A participant shall not divulge to other clients, press or any other person any information about its clients which has come to its knowledge except with the approval/authorisation of the clients or when it is required to disclose the information un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccess to all relevant information about the business on a timely basis. 22. A participant shall ensure that good corporate policies and corporate governance are in place. 1 [ PART-B [SEE REGULATION 27] Code of Conduct for governing board, directors, committee members and key management personnel I. Governing Board The governing board of the depository shall (a) evaluate profitability margins of the depositories. (b) ensure adequacy of resource allocation (both financial and human) towards regulatory compliances. (c) focus on strategy, policy level issues and important matters and may review the day-to-day operational matters only in exceptional cases. (d) oversee the critical operations including technology as well as the regulatory, risk management, compliance and investor grievance redressal functions of the depository. (e) take the lead in succession planning for managing director and other key positions. (f) play an active role in defining, establishing and documenting risk management framework, covering risk appetite or risk tolerance policy of the depository and ensure that the policy contains the following. i. role of risk a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chief risk officer, the chief information security officer, the statutory auditor of the depository and any other person as determined by the public interest directors and non-independent directors to discuss important issues concerning the depository, on a periodic basis as specified by the Board. (o) periodically review the frequency of meetings and agenda items of the governing board to ensure that the number of meetings is rationalized and all important issues are discussed. (p) ensure that the agenda papers are approved by the chairman of the governing board. (q) ensure that members of the governing board can place agenda item during their meeting. (r) be responsible for monitoring compliance with the code of conduct by the members of the governing board of the depository. (s) uphold a strong culture in the depository and promote the target culture from the top through behavior, actions and effective communication. (t) communicate the guiding principles for institution s target regulatory, compliance, risk and conduct culture. (u) endeavor that the depository put in place key elements related to culture such as: i. adequate training programs to help ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the depository; (l) not commit any act which will put the reputation of the depository in jeopardy; (m) comply with the provisions of all applicable laws to the securities market; (n) directors and key management personnel shall at all point of time comply with all the internal policies of the depository including their code of conduct. If there is a conflict between the code of conduct policy of the depository with those provided by the Board, then the policy issued by the Board shall prevail. 2. Regulatory Compliances. Every director, committee member and key management personnel of the depository shall (a) ensure that the depository abides by all the applicable provisions of the Act, the Depositories Act, 1996, rules and regulations framed thereunder and the circulars, directions or any other instructions issued by the Board from time to time; (b) ensure compliance at all levels so that the regulatory system does not suffer any breaches; (c) ensure that the depository takes steps commensurate to honour the time limit stipulated by Board for corrective action. 3. Disclosures of Beneficial Interest. All directors, committee members and key manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ensure that the same are incorporated in the final minutes; (e) insist on the minutes of the previous meeting being placed for approval in subsequent meeting; (f) endeavor to have the date of next meeting fixed at each governing board meeting and committee meetings respectively in consultation with other respective members of the governing board and committees; (g) ensure that all important agendas placed before the governing board of depository and committees are deliberated in a timely manner; (h) not support any decision in the meeting of the governing board of depository and the committees respectively which may adversely affect the interest of investors and shall report forthwith any such decision to the Board. 2. Role of the directors and committee members in the day to day functioning of the depository. (a) The directors and committee members shall not interfere in the day to day functioning of the depositories and shall limit their role to decision making on policy issues and to issues as the governing board of depository may decide. (b) The directors and committee members shall abstain from influencing the employees of the depositories in conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsecutive meetings of the governing board or do not attend seventy-five percent of the total meetings of the governing board in a calendar year. (b) Public interest directors shall meet separately, at least once in six months to exchange views on critical issues. Public interest directors shall submit a report of such meeting to the Board and to the governing board of the depository within the time and manner as may be specified by the Board from time to time. (c) Public interest directors shall identify important issues which may involve conflict of interest for the depository, or may have significant impact on the functioning of the depository, or may not be in the interest of securities market. The same shall be reported to the Board in a time bound manner as may be decided by the depository. (d) Public interest directors shall have regular oversight on regulatory requirements and observations of Board s inspection particularly on issues of governance standards, technology and cyber security and system audit and cyber security audit observations. (e) Public interest directors should be proactive in identifying any issues concerning functioning of the depository and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Depositories Act, 1996, any Rules or Regulations framed thereunder, circulars, guidelines and any other directions issued by the Board from time to time. (b) adopt appropriate due diligence measures. (c) take effective measures to ensure implementation of proper risk management framework and good governance practices. (d) take appropriate measures towards investor protection and education of investors. (e) treat all its applicants/members in a fair and transparent manner. (f) promptly inform the Board of violations of the provisions of the Act, the Depositories Act, 1996, rules, regulations, circulars, guidelines or any other directions by any of its issuer or issuer s agent. (g) take a proactive and responsible attitude towards safeguarding the interests of investors, integrity of depository s systems and the securities market. (h) endeavor for introduction of best business practices amongst itself and its members. (i) act in utmost good faith and shall avoid conflict of interest in the conduct of its functions. (j) not indulge in unfair competition, which is likely to harm the interests of any other Depository, their participants or investors or is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate office if they remain absent for three consecutive meetings of the governing board or do not attend seventy five percent of the total meetings of the governing board in a calendar year. b) Public interest directors shall meet separately, at least once in six months to exchange views on critical issues. iii. Strategic planning Every director of the depository shall: a) participate in the formulation and execution of strategies in the best interest of the depository and contribute towards pro-active decision making at the governing board level; b) give benefit of their experience and expertise to the depository and provide assistance in strategic planning and execution of decisions. iv. Regulatory compliances Every director of the depository shall: a) endeavour to ensure that the depository abides by all the provisions of the Securities and Exchange Board of India Act, 1992, Depositories Act, 1996, rules and regulations framed thereunder and the circulars, directions issued by the Board from time to time; b) endeavour compliance at all levels so that the regulatory system does not suffer any breaches; c) endeavour to ensure that the depository t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Code of Ethics for directors and key management personnel of the depository seeks to establish a minimum level of business/ professional ethics to be followed by these directors and key management personnel, towards establishing a fair and transparent marketplace. The Code of Ethics is based on the following fundamental principles: Fairness and transparency in dealing with matters relating to the depository and the investors. Compliance with all laws / rules / regulations laid down by regulatory agencies / depositories. Exercising due diligence in the performance of duties. Avoidance of conflict of interest between self-interest of directors/ key management personnel and interests of depository and investors. ii. Regulatory Oversight Committee For overseeing implementation of this Code, a regulatory oversight committee shall be constituted by every depository under the governing board. iii. General standards a) Directors and key management personnel shall endeavour to promote greater awareness and understanding of ethical responsibilities. b) Directors and key management personnel, in the conduct of their business shall observe high stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nominees or nominees of Govt. of India statutory bodies or financial institutions and are governed by their own codes shall be exempt from this requirement. vi. Avoidance of conflict of interest a) No director of the governing board or member of any committee of the depository shall participate in any decision making/adjudication in respect of any person /matter in which he is in any way, directly or indirectly, concerned or interested. b) Whether there is any conflict of interest or not in a matter, shall be decided by the governing board. vii. Disclosures of beneficial interest All directors and key management personnel shall disclose to the governing board, upon assuming office and during their tenure in office, whenever the following arises:- a) any fiduciary relationship of self and family members and directorship/partnership of self and family members in any depository participant or registrar and transfer agent; b) shareholding, in cases where the shareholding of the director key management personnel, directly or through his family exceeds five percent in any listed company or in other entities related to the securities markets; c) any other busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airness and integrity of the system in letter and spirit. 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/125 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) before it was read as, Part-D Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 [See regulation 17] CODE OF CONDUCT FOR DEPOSITORIES 1. A depository shall always abide by the provisions of the Act, Depositories Act, 1996, Rules, Regulations, circulars, guidelines and any other directions issued by the Board. 2. A depository shall take appropriate measures towards investor protection and education of investors. 3. A depository shall treat all its applicants/participants in a fair and transparent manner. 4. A depository shall promptly inform the Board of violations of the provisions of the Act, Depositories Act, the rules, the regulations, circulars, guidelines or any other directions by any of its participants, issuer or issuer s agent. 5. A depository shall take a proactive and responsible attitude towards safeguarding the interests of investors, integ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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