Markets regulator Securities and Exchanges Board of India (SEBI) has put out a comprehensive framework to deal with technical glitches at market infrastructure institutions (MIIs).
As per a statement released by the regulator on February 25, MIIs should submit a detailed root cause analysis to SEBI in a time-bound manner after due vetting by the Technology Committee and Governing Board of the MII.
This report will be placed before the Technical Advisory Committee (TAC) of SEBI, which consists of eminent academicians and technocrats.
The framework proposes a monitoring mechanism for ensuring corrective action along with appropriate penalty wherever warranted.
Apart from this, the regulator said that it would take all necessary measures to ensure rectification of the underlying causes including addressing institutional deficiencies.
"Recognizing the importance of Business continuity, MIIs are required to carry out live trading from disaster recovery site for 2 consecutive days every six months apart from having to conduct quarterly disaster recovery drills," it said.
SEBI
has sought a report from the National Stock Exchange (NSE) on shutdown of trading at the exchange on February 24.
The capital markets regulator had earlier imposed a penalty of Rs 50 lakhs on the exchange due to several technical glitches. SEBI has a plan to compensate investors for losses due to technical glitches. However, the method of compensation is yet to be finalised.
