Sebi tightens technology resilience rules for stock market infrastructure

The Securities and Exchange Board of India (Sebi) has unveiled a comprehensive framework designed to bolster the technological backbone of the country's financial markets infrastructure. The new norms will require exchanges and depositories to conduct disaster recovery drills at least once every four hours, a significant reduction from current practices, ensuring faster restoration of critical systems during emergencies.

The proposed guidelines aim to strengthen operational continuity across India's stock market ecosystem by imposing stricter standards on data recovery, system redundancy, and technology governance. Market infrastructure institutions will need to demonstrate enhanced capabilities in detecting and responding to technology failures, with clearly defined recovery time objectives and recovery point objectives for mission-critical applications.

The framework also emphasizes the importance of regular stress-testing and comprehensive business continuity planning. Exchanges and depositories will be required to maintain updated technology roadmaps and ensure that their infrastructure can withstand various stress scenarios, including cybersecurity threats and operational disruptions.

Sebi's move reflects growing global concerns about maintaining the stability and reliability of financial market infrastructure in an increasingly digital economy. The regulator has indicated that these measures will apply to all recognised stock exchanges, clearing corporations, and depositories operating under its jurisdiction, ensuring uniform standards across the market infrastructure sector.

The proposed norms are expected to be implemented following a consultation period, during which market participants and stakeholders can provide feedback on the framework's provisions.