(1) The recognised stock exchange/ recognised clearing corporation shall ensure that all its directors and key management personnel are fit and proper persons at all times.
(2) For the purposes of these regulations, a person shall be deemed to be a fit and proper person if—
(a) such person has a general reputation and record of fairness and integrity, including but not limited to—
(i) financial integrity;
(ii) good reputation and character; and
(iii) honesty;
(b) such person has not incurred any of the following disqualifications—
(i) the person or any of its whole time directors or managing partners, has been convicted by a court for any offence involving moral turpitude or any economic offence or any offence against the securities laws;
(ii) an order for winding up has been passed against the person;
(iii) the person, or any of its whole time directors or managing partners, has been declared insolvent and has not been discharged;
(iv) an order, restraining, prohibiting or debarring the person or any of its whole time directors or managing partners, from dealing in securities or from accessing the securities market, has been passed by the Board or any other regulatory authority and a period of three years from the date of the expiry of the period specified in the order has not elapsed;
(v) any other order against the person, or any of its whole time directors or managing partners, which has a bearing on the securities market, has been passed by the Board or any other regulatory authority, and a period of three years from the date of the order has not elapsed;
(vi) the Board has initiated recovery proceedings under the SEBI Act, 1992 and are pending;
(vii) the person has been found to be of unsound mind by a court of competent jurisdiction and the finding is in force;
(viii) the person is financially not sound or has been categorized as a willful defaulter;
and
(ix) any other disqualification as specified by the Board.
(3) If any question arises on the decision of a recognised stock exchange or recognized clearing corporation as to whether a person is a fit and proper person, the Board's decision on such question shall be final.
Disclosure of shareholding