SEBI Streamlines Disaster Recovery Tests for Market Infrastructure

The Securities and Exchange Board of India (SEBI) has put forward a revised framework requiring market infrastructure institutions to conduct shorter, more targeted disaster recovery drills. Under the new proposal, these critical tests would be condensed to a four-hour window, a significant reduction from existing protocols.

The streamlined approach maintains rigorous testing standards despite the shorter timeframe. Market institutions would still be required to assess their capacity to handle real-life system loads, simulate disruption scenarios, and validate their data recovery mechanisms. The proposal reflects SEBI's attempt to balance operational resilience with practical implementation constraints faced by exchanges, clearing corporations, and depositories.

Disaster recovery exercises are essential safeguards in India's financial infrastructure, ensuring that critical market systems can withstand and recover from potential technical failures or emergencies. By compressing these drills into a four-hour window, SEBI appears to be addressing feedback about the resource-intensive nature of longer testing protocols while preserving the regulatory intent.

The framework is part of SEBI's broader regulatory approach to strengthen market infrastructure resilience. Market participants and institutions are expected to provide feedback on the proposal, which will inform the regulator's final guidelines for implementation across India's securities market ecosystem.