About Market Infrastructure Institutions (MIIs):

• Stock exchanges, depositories and clearing houses are Market Infrastructure Institutions (MIIs) and constitute a key part of the nation’s vital economic infrastructure.
• According to the Bimal Jalan Committee (2010), MIIs are systemically important for India as these institutions have seen phenomenal growth in terms of the market capitalization of listed companies, capital raised and the number of investor accounts with brokers and depositories and the value of assets held in the depositories account.

Institutions in India that qualify as MIIs

• Stock Exchanges: SEBI lists 7 institutions including BSE, NSE, Multi Commodity Exchange of India and Metropolitan Stock Exchange of India as MIIs.
• Depositories: They are charged with the safekeeping of securities and enabling their trading and transfer.
• Central Depository Services Ltd. and the National Securities Depository Ltd. have been listed as MIIs.
• Clearing houses: They help validate and finalise securities trades and ensure that both buyers and sellers honour their obligations. SEBI lists seven clearing houses including the Multi Commodity Exchange Clearing Corporation as MIIs.

Governance norms in the regulation of MIIs

• Any failure of MIIs could result in an overall economic downfall that could potentially extend beyond the boundaries of the securities market. Hence, the governance and oversight of MIIs are critical, and need to be of the highest standards.

Source: EPIC March 2022