The Securities and Exchange Board of India (SEBI) on December 20, 2023, issued a circular regarding the Business Continuity for Clearing Corporations through Software as a Service (SaaS) Model.
To strengthen the Business Continuity framework of Market Infrastructure Institutions (MIIs), particularly from the perspective of handling major software malfunction, discussions were held with MIIs and it was decided that in the first phase, systems would be designed to provide additional tools for business continuity in case of issues with Risk Management Systems (RMS) of CCs.
The RMS is classified as a critical system of CC and plays an important role in ensuring the smooth and uninterrupted functioning of the securities market by carrying out online real-time risk management of trades happening on stock exchanges. Non-availability of RMS poses a major risk to the continuity of trading on stock exchanges. To further manage disruptions impacting the availability of RMS, it is proposed to have another contingency measure in place under the Software as a Service (SaaS) model.
Each CC shall design a system to run its RMS-related operations, to risk manage trades for its clearing members, using the RMS-related software components of another CC. This instance would be called SaaS-RMS. For instance, when NCL designs SaaS-RMS using software of ICCL, NCL would be considered as client CC and ICCL would be considered as service provider CC.
For further details, please refer to the document below.
[Circular No. SEBI/HO/MRD/TPD/P/CIR/20]
