MANU/SSMD/0024/2021

Ministry : Securities and Exchange Board of India

Department/Board : Market Regulation Department

Circular No. : SEBI/HO/MRD1/DTCS/CIR/P/2021/590

Date : 05.07.2021

Notification/ Circulars Referred : Number SEBI/HO/MRD1/DTCS/CIR/P/2021/33 MANU/SSMD/0008/2021

Citing Reference:
Number SEBI/HO/MRD1/DTCS/CIR/P/2021/33 MANU/SSMD/0008/2021  Referred

To,

All Stock Exchanges
All Clearing Corporations
All Depositories,

Dear Sir/Madam,

Standard Operating Procedure for handling of technical glitches by market infrastructure institutions and payment of financial disincentives thereof

1. MIIs (i.e. Stock Exchanges, Clearing Corporations and Depositories) are systemically important institutions as they, inter-alia, provide infrastructure necessary for the smooth and uninterrupted functioning of the securities market.

2. With increasing dependence on technology, as the operations and functioning of MIIs are fully automated right from order entry to order matching to trade confirmation leading up to clearing and settlement of trades, the instances of technical glitches at MIIs, leading to business disruption/unavailability of services provided by MIIs, have been occurring, despite various mechanisms stipulated by SEBI such as Business Continuity Planning, Disaster Recovery policies, System Audit etc.

3. The general practice in the computing/technology industry to deal with business disruption/unavailability of services, is to work with specified downtime and for downtimes beyond such specified time, a pre-defined penalty structure is included in Service Level Agreement.

4. Considering the criticality of smooth functioning of systems of MIIs (as any disruption adversely impacts all classes of investors/market participants as well as the credibility of the securities market), specifying a pre-defined threshold for downtime of systems of MIIs becomes desirable. For any downtime or unavailability of services, beyond such pre-defined time, there is a need to ensure tha........