SEBI proposes reduced IT capacity for commodity stock exchanges citing underutilisation

Relief for commodity exchanges, SEBI proposes reduced capacity of IT systems, citing underutilization of system

The Securities and Exchange Board of India (SEBI), the markets regulator, has proposed lowered IT systems capacity at commodity stock exchanges. The reduction has been proposed based on feedback from such exchanges.

In a draft circular issued on June 30th, SEBI noted that, “It is proposed that initially for commodity stock exchanges, the installed capacity of the critical IT systems of MIIs  may be kept as 2 times the projected peak load.” MIIs refers to market infrastructure institutions, which includes exchanges, clearing corporations, and depositories.

To ensure uniformity between stock exchanges and clearing corporations vis a vis commodity derivatives, SEBI suggested that capacity planning and real-time performance guidelines for both be made the same.

The rationale for reduced norms is underutilisation of IT capacity at commodity stock  exchanges. The SEBI draft circular noted that it came to this conclusion by analysing  the data from such exchanges.

Also read: Brokers hope for relaxation as Sebi, exchanges likely to review norms defining a technical glitch

Per  an earlier circular of September 2016, commodity stock exchanges were to maintain at least four times the peak load capacity, while other MIIs are required to maintain 1.5 times.

SEBI has also proposed that exchanges and clearing corporations will maintain an asset register of all IT components, monitor their usage on a continuous basis, and establish a utilisation threshold for each component.

If the utilisation of any component exceeds 75 percent of the installed capacity, immediate action will have to be taken to enhance resources.

SEBI has sought views till July 20 on the draft circular.

Also read: Crackdown on ‘furus’ starts: Meta mandates SEBI verification for investment ads