Sebi outlines role of oversight committee for product design

To bring uniformity with respect to the role of the oversight committee on 'product design', Sebi today said the panel will be responsible for introduction of new contracts, modifications of existing product and reviewing the design of the already approved and running contracts.
The move comes after Sebi observed that the commodity derivatives exchanges have been adopting varied approach both in terms of constitution as well as the functioning of such oversight committees, the regulator said in a circular.
Sebi, in November 2015, had asked all national commodity derivatives exchanges to constitute an oversight committee for 'product design', chaired by a Public Interest Director, within three months.

To bring uniformity with respect to the role of the committee on product design, Sebi has decided that the functions of the panel will be to oversee the regulator's inspection observation on product design related issues and to estimate the adequacy of resources dedicated to product design related function.
The committee will be responsible for overseeing "matters related to product design such as introduction of new products/contracts, modifications of existing product/contract designs etc and review the design of the already approved and running contracts".
The head of department handling these matters will report directly to the committee and also to the Managing Director.

"Any action of the exchange against the head(s) shall be subject to an appeal to the committee, within such period as may be determined by the governing board," Sebi noted.
Besides, the stock exchanges operating in the International Financial Services Centre (IFSC) would also be required to constitute an oversight committee for product design and discharge their functions.