The Montreal Exchange (MX) is proposing rule changes that will clarify the governance structure for its regulatory division in response to feedback and in an effort to bring its structure more in line with other major derivatives exchanges.
“The objective of the proposed amendments is to better align the governance of the division with the practices of other options and futures exchanges globally” as well as to reflect the MX’s recognition as an exchange and a self-regulatory organization (SRO), the MX says in a statement.
Specifically, the MX is seeking to amend its rules to ensure that the special committee that oversees its regulatory division is a committee of its board.
The composition of the committee evolved over time so that it didn’t include any directors or employees of the exchange, according to the MX’s notice. However, ongoing dialogue with regulators “has led the [MX] to revisit the governance structure, which has resulted in the present proposal.
“As a matter of sound corporate governance principles and public interest, a special committee which is a committee of the board better aligns decision making powers with responsibilities,” the MX’s notice says. “Considering that the SRO responsibilities of the [exchange] ultimately rest with the board, the special committee should therefore be a committee of the board.”
Comments on the proposed amendments are due by May 8.