Role of user committees

12. A Recognised Body should consider all relevant stakeholders' interests, including those of its Members and other participants, and Issuers, in making major decisions, such as those relating to its system's design, overall business strategy and rules and procedures. A Recognised Body which has cross-border operations should ensure that full range of views across jurisdictions in which it operates is appropriately considered in its decision-making process.
13. In some instances, a Recognised Body may be required under the applicable Rules to undertake public consultation in relation to certain matters, such as any proposed amendments to its Business Rules under MIR Rule 2.11.
14. Effective mechanisms for obtaining stakeholder input to the Recognised Body's decision-making process, including where such input is mandatory, include the establishment of, and consultation with, user committees. As opinions among interested parties are likely to differ, a Recognised Body should have clear processes for identifying and appropriately managing the diversity of stakeholder views and any conflicts of interest between stakeholders and the Recognised Body.
15. Where a Recognised Body establishes user committees to obtain stakeholder input to its decision making, to enable such committees to be effective, a Recognised Body should structure such committees to:
a. have adequate representation of the Recognised Body's Members and other participants, and stakeholders including Issuers. The other stakeholders of a Recognised Body may include Clients of its Members or participants, custodians and other service providers;
b. have direct access to the members of the Recognised Body's Governing Body and members of the senior management as appropriate;
c. not be subject to any direct or indirect influence by the senior management of the Recognised Body in carrying out their functions;
d. have clear terms of reference (mandates) which include matters on which the advice of user committees will be sought. For example, the criteria for selecting Members, setting service levels and pricing structures and for assessing the impact on Members and other stakeholders of any proposed material changes to the Recognised Body's existing arrangements (MIR Rule 2.11) and any amendments to its Business Rules (MIR Rule 2.11); and
e. have adequate internal governance arrangements (such as the regularity of committee meetings and the quorum and other operational procedures).
Amended on (3 February, 2020).