National Stock Exchange splits operations from regulatory oversight

National Stock Exchange has separated critical operations from regulatory, compliance, risk-management and investor-grievance responsibilities through two executive-director verticals appointed in May 2026. The structure operates under a 12-member Governing Board with seven Public Interest Directors and five Non-Independent Directors, meeting the requirement that Public Interest Directors cannot be fewer than Non-Independent Directors.

How has NSE split operations from regulatory oversight?

NSE has assigned critical operations to Vertical 1 and regulatory oversight to Vertical 2 under separate Executive Directors appointed for five-year terms in May 2026. Viral Mody became Executive Director, Vertical 1, effective May 14, 2026, while Sanjay Shorey became Executive Director, Vertical 2, effective May 18, 2026. Shareholders approved both appointments on June 12, 2026.

Vertical 1 covers critical operations and is led by Mody, whose biography says he oversees the integration of advanced systems to enhance market operations and accelerate digital transformation. The management chart places three functions in this vertical: the Chief Technology Officer for Operations, the Chief Technology Officer for Technology Infrastructure and the Chief Information Security Officer. The division therefore groups operating technology, infrastructure and information-security responsibilities beneath one executive role from May 14, 2026.

Vertical 2 covers regulatory, compliance, risk management and investor grievances and is led, under the Governing Board appointment disclosure, by Shorey. Its charted functions include the Chief Enterprise Risk Officer, the Chief Regulatory Officer for member compliance, surveillance, member inspection and investigation, the Chief Regulatory Officer for listing and investor compliance, and the Company Secretary and Compliance Officer. This assigns market-member oversight, listing and investor compliance, enterprise risk and grievance functions outside the critical-operations vertical.

The organisation chart labels the Vertical 2 Executive Director as “Sanjay Sharma,” but the Governing Board table, biography and appointment terms identify Shorey as Executive Director, Vertical 2, from May 18, 2026. The appointment terms record a five-year tenure for Shorey, approved by the Governing Board on March 25, 2026 and by shareholders on June 12, 2026. The supplied disclosure therefore contains an unresolved naming inconsistency in the management chart.

What oversight separates NSE’s regulatory-risk executive from management?

NSE requires the Regulatory Oversight Committee and Risk Management Committee to meet the Executive Director of Vertical 2 separately every quarter without the Managing Director and Chief Executive Officer or other executives present. This is the disclosed mechanism for direct committee engagement with the executive responsible for regulatory, compliance, risk-management and investor-grievance functions.

Both the Regulatory Oversight Committee and the Risk Management Committee must independently assess the performance of the Executive Director of Vertical 2. The Nomination and Remuneration Committee considers those two inputs together with the Managing Director and Chief Executive Officer’s input when finalising the appraisal. The appraisal route differs for Vertical 1, where the committee considers inputs from the Standing Committee on Technology and the Managing Director.

The Nomination and Remuneration Committee was last reconstituted on May 8, 2026 and has four members, including three Public Interest Directors and one Non-Independent Director. Its remit includes determining the tenure of key management personnel in regulatory, compliance, risk-management and investor-grievance roles. It must also ensure that no key management personnel report to a non-key management person, linking the executive split to the exchange’s stated management-accountability framework.

What risks must NSE’s two verticals be monitored for?

NSE’s Risk Management Committee must monitor risks associated with both Vertical 1 and Vertical 2 through a board-approved Risk Management Framework, or RMF. The RMF is intended to ensure continuity of operations at all times and must identify internal and external financial, operational, sectoral, sustainability, information and cyber-security risks. Sustainability risks specifically include environmental, social and governance, or ESG, risks.

The RMF must include risk-mitigation measures, internal-control systems and processes, and a business-continuity plan. The Risk Management Committee must review the RMF and mitigation measures at least annually, taking account of changing industry dynamics and complexity. It must also keep the Governing Board informed about implementation of the framework and any deviation from it.

The committee has 11 listed participants: five Public Interest Directors, the two Executive Directors, one Independent External Professional, the Managing Director and Chief Executive Officer, and two invitees. P.R. Ramesh, a Public Interest Director appointed on May 6, 2026, chairs the committee. The Chief Enterprise Risk Officer and Chief Information Security Officer attend as invitees, connecting enterprise-risk and cyber-security reporting to the committee’s monitoring of both verticals.

The Chief Risk Officer reports to the Managing Director and Chief Executive Officer, but the Risk Management Committee must hold a separate meeting with that officer at least once every quarter without the Managing Director and Chief Executive Officer or any other executive present. The committee must approve the half-yearly risk report submitted by the Chief Risk Officer to the Securities and Exchange Board of India, or SEBI, and the Governing Board. These requirements mean the two-vertical structure depends on recurring committee review as well as executive reporting lines.

How does NSE’s Governing Board support the split?

NSE’s 12-member Governing Board has seven Public Interest Directors and five Non-Independent Directors, including the Managing Director and Chief Executive Officer and the two Executive Directors. The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, or SECC Regulations, require a recognised stock exchange board to include non-independent directors, Public Interest Directors, a managing director and executive directors.

The SECC Regulations also require the chairperson to be selected from the Public Interest Directors. Srinivas Injeti has been Chairperson and Public Interest Director since September 2, 2025, for a three-year term. NSE states that its seven Public Interest Directors include the Chairperson and two women Directors, giving that category seven of the 12 board seats disclosed in the prospectus.

NSE’s Audit Committee provides a separate review channel for financial reporting, internal financial controls and risk-management systems. The five-member committee consists entirely of Public Interest Directors and was last reconstituted on May 8, 2026, with Rajesh Gopinathan as chairperson. Its terms include reviewing internal-audit adequacy, internal investigations into suspected fraud or material internal-control failures, and the whistle-blower mechanism.

What does the executive split mean for NSE’s governance structure?

NSE’s May 2026 appointments establish different executive homes for technology-led critical operations and for regulatory, compliance, enterprise-risk and investor-grievance responsibilities. Vertical 1 combines operations, technology infrastructure and cyber-security leadership, while Vertical 2 brings together the Chief Enterprise Risk Officer, two regulatory officers and the Company Secretary and Compliance Officer. The distinction is reinforced by different committee inputs for the two executives’ performance appraisals.

The arrangement will persist as disclosed only if the prescribed oversight processes continue, including quarterly separate meetings with the Executive Director of Vertical 2 and the Chief Risk Officer, annual RMF reviews and half-yearly risk reporting to SEBI and the Governing Board. A further item to watch is whether NSE corrects or explains the management-chart reference to “Sanjay Sharma,” which differs from the board-approved appointment of Shorey effective May 18, 2026.

Conclusion

NSE has divided operational technology accountability from the regulatory-risk and investor-compliance function by appointing two Executive Directors in May 2026. The Governing Board’s seven Public Interest Directors, compared with five Non-Independent Directors, and the specified committee appraisal process place the regulatory vertical within a defined board-governance structure.

The next disclosed tests are procedural rather than financial: the separate quarterly committee meetings, the Chief Risk Officer’s half-yearly reports to SEBI and the Governing Board, and the Risk Management Framework’s annual review. NSE’s management chart also requires clarification because its Vertical 2 name differs from the Governing Board and appointment disclosures.