SEBI Introduces IT Safety Framework For Securities Market

The Securities and Exchange Board of India (SEBI) has introduced an IT Resilience Index (ITRI) framework to strengthen the resilience and reliability of technology systems in the securities market.

This framework will cover the oversight of resilience of IT systems, identify emerging weaknesses at an early stage, and initiate timely corrective measures. The regulator said the new framework will measure the robustness of critical IT systems on a 100-point scale across nine parameters.

Availability and security carry the highest weight at 20 points each, followed by integrity, governance, reliability and monitoring, business continuity, and modularity and flexibility, each with 10 points weightage. Scalability and other parameters, including incident handling, carry five points each.

The IT systems of Market Infrastructure Institutions (MIIs) form the backbone of smooth and uninterrupted functioning of the securities market and are fundamental to ensuring its orderly, efficient, and uninterrupted functioning. Any disruption, degrading in performance, or compromise of these systems may adversely impact critical market operations and pose risks to the trust in the securities market.

The regulator directed MIIs to develop an Early Warning System to detect possible deterioration in any of the parameters of ITRI leading to possible performance issues, slowness, etc. in their systems and framework to remedy these.

As MIIs have already implemented the beta version of the ITRI framework, the regulator directed them to operationalize the ITRI framework, including Early Warning System and Real-Time Monitoring of Service Delivery, by February 28, 2027. MIIs should compute ITRI on a half-yearly basis within a period of 60 days from the end of each half-year and submit the comparative analysis of two consecutive half-years and corrective actions taken to their Standing Committee on Technology (SCOT) and the Governing Board.

ITRI would be computed automatically from IT systems without manual intervention. This move by SEBI aims to ensure the smooth functioning of the securities market by minimizing the risks associated with technology systems.

The introduction of the ITRI framework is a significant step towards enhancing the resilience and reliability of technology systems in the securities market. It will help MIIs to identify potential weaknesses and take corrective measures to prevent disruptions and maintain the trust of investors.

In the context of the securities market, the ITRI framework will play a crucial role in ensuring the orderly and efficient functioning of the market. It will help to mitigate the risks associated with technology systems and maintain the confidence of investors.

The implementation of the ITRI framework is expected to have a positive impact on the securities market. It will help to enhance the resilience and reliability of technology systems, reduce the risk of disruptions, and maintain the trust of investors.

In conclusion, the introduction of the ITRI framework by SEBI is a significant step towards enhancing the resilience and reliability of technology systems in the securities market. It will help to minimize the risks associated with technology systems and maintain the trust of investors, which is essential for the smooth functioning of the securities market.