NSE to begin hunt for MD and CEO soon

PALAK SHAH | | | Updated on: Nov 21, 2021
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NSE's current CEO Vikram Limaye, whose term ends in July 2022, can re-apply

The National Stock Exchange (NSE) is likely to begin the hunt for a new MD and CEO in the next couple of months, sources told BusinessLine .

The five-year term of Vikram Limaye, NSE's incumbent MD and CEO, ends on July 16, 2022 and he is eligible to apply for another term. But rules by markets regulator SEBI stipulate that the incumbent has to compete with another candidate to win his next term.

The race for the top post at NSE may be important since the exchange is awaiting SEBI nod for its IPO. Limaye is credited with rebranding the NSE and derivatives trading witnessed massive growth under him. But the recurring tech glitches and controversies surrounding NSE's technology infrastructure still remain the stumbling block for the exchange. SEBI has recently issued a show-cause notice to NSE officials for a three-hour trading halt in February this year.

The process

Sources close to the developments at NSE said that the process for the hunt for the new MD and CEO has to start at least six months prior to the term of the incumbent coming to an end. Since stock exchanges and depositories are key market infrastructure companies, SEBI has the final say on the appointment of the MD and CEO. In 2018, SEBI had rejected an extension of the term to PS Reddy at CDSL. Then, SEBI also wrote to the depositories and exchanges asking them to begin the procedure for appointment of MD and CEO six months in advance. The procedure involves setting up a committee involving board members of the exchange and two outside experts.

An advertisement has to be issued in at least one leading national daily inviting applications for the post. The invitation has to be kept open for a month. At least two names of the candidates selected by the committee have to be sent to the SEBI for approval.

It is mandatory that one of the persons interviewed by the committee is an external candidate. After SEBI approval, the exchanges are also required to take approval from shareholders and give at least three months time to the candidate to serve a notice period in his or her existing job. Hence, six months time is required for the entire procedure.

BSE MD and CEO Ashish Chauhan's second term will end on November 1, 2022 and the exchange will have to begin the hunt for a new MD and CEO latest by May next year. NSE did not reply to an email query seeking its response

Published on November 22, 2021

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