Stock broker Fyers has been fined Rs 4 lakh for various violations including not adequately monitoring peak loads and not installing capacity to meet the required 1.5x threshold of the peak load.
In the order issued on February 13, the Securities and Exchange Board of India (SEBI) stated that the broker had also failed to prove that its governing board conducted the mandated quarterly reviews of Business Continuity Plan-Disaster Recovery (BCP-DR) Policy during the period under investigation, and failed to submit documentary evidence for constitution of Incident and Response Team (IRT) and Crisis Management Team (CMT).
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In the order, SEBI's Adjudicating Officer Asha Shetty wrote, "The Noticee (Fyers) is in violation of the regulatory requirements and standards expected from listed entity, therefore, the actions of Noticee should be dealt appropriately by imposing monetary penalty as effective deterrence."
On the brokerage violating peak-load norms, the order said, "the Noticee (Fyers) submitted documents such as load graphs and minutes of management meetings that referenced capacity upgrades for bandwidth, storage, and server issues. However, the evidence provided pertain to isolated metrics on specific dates rather than comprehensive, systematic quarterly monitoring. A review of the minutes reveal that the management discussions were issue-specific and reactive, lacking a structured evaluation of peak load data for trading applications, servers, and network architecture."
"Furthermore, no evidence has been furnished to demonstrate that peak load monitoring was conducted by the stock broker for review or that the installed capacity met the required 1.5 times threshold of the peak load."
Shetty noted that, the absence of continuous and holistic peak load monitoring undermines the brokerage's ability to ensure robust system capacity planning, which is crucial for maintaining the stability and efficiency of trading operations.
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