In its consultation paper, Sebi suggested merging the Master Circulars for stock exchanges and clearing corporations with the one for commodity derivatives. Additionally, it plans to create a unified circular encompassing key IT areas such as cyber security, cyber resilience, annual system audits, business continuity planning and disaster recovery (BCPDR), capacity planning, and technology advisories.
Sebi highlighted that numerous provisions are currently duplicated across various circulars and frameworks, which could be streamlined to enhance regulatory clarity and lessen the compliance burden without compromising oversight.
Key proposals from Sebi include the removal of repetitive mentions of the Cyber Security and Cyber Resilience Framework (CSCRF) from different sections of existing circulars, as the framework is already applicable to market infrastructure institutions (MIIs) and intermediaries.
The regulator also suggested aligning capacity planning requirements across stock exchanges, clearing corporations, and depositories.
The intent behind these proposals is to simplify regulatory demands, eliminate unnecessary provisions, and discontinue redundancies, ultimately facilitating business operations and reducing compliance pressures on exchanges, according to Sebi.
The proposed framework stipulates that immediate corrective action must be taken if the actual utilization of any IT component exceeds 75 percent of its installed capacity. Such cases will be reviewed by the Standing Committee on Technology (SCOT), and capacity expansion will be carried out if repeated threshold breaches occur.
”Generally, if any component’s actual capacity utilization at stock exchanges and clearing corporations surpasses 75 percent of the installed capacity, the MII must undertake immediate actions such as fine-tuning the applications/systems or increasing the capacity. SCOT will supervise these actions taken by the MII,” Sebi advised.
The MII’s Capacity Planning and Real-Time Performance Monitoring Policy will incorporate a framework for addressing instances of actual capacity utilization exceeding 75 percent of installed capacity, including scenarios requiring capacity augmentation.
For depositories, if the actual capacity utilization of any IT component goes beyond 75 percent of installed capacity for a continuous period of 15 days, prompt action will be initiated to enhance capacity, Sebi recommended.
Furthermore, the regulator proposed merging provisions regarding co-location and co-hosting facilities in the commodity derivatives segment with the broader technology framework applicable to stock exchanges, while still preserving segment-specific guidelines.
To mitigate duplication, it was suggested that detailed provisions on system clock synchronization with atomic clocks be maintained at a single location within the proposed framework rather than being repeated in multiple sections.
The consultation paper indicates that a unified circular for MIIs will amalgamate technology-related provisions that are currently distributed across various circulars governing stock exchanges, clearing corporations, and depositories.
The Securities and Exchange Board of India (Sebi) is inviting public feedback on these proposals until July 13.
