The Securities and Exchange Board of India (SEBI), on November 28, 2024, issued a notification regarding the Business Continuity for Interoperable Segments of Stock Exchanges.
The following has been stated-
To strengthen the Business Continuity Planning (BCP) framework for Market Infrastructure Institutions (MIIs), SEBI has introduced new measures to address trading venue outages during trading hours. These include leveraging the interoperability among Clearing Corporations and multi-exchange setups to provide alternative trading venues, mitigating price risks for participants with open positions. The mechanism categorizes products into common scrips, exclusively listed scrips, and non-correlated index derivatives, with tailored provisions for hedging and continuity. Affected exchanges must notify SEBI and invoke the continuity mechanism within 75 minutes of an outage.
In the initial phase, SEBI had mandated a Software as a Service (SaaS) model for Clearing Corporations’ Risk Management Systems. In the second phase, SEBI has designated NSE and BSE as alternative trading venues for each other. Both exchanges are tasked with preparing a joint Standard Operating Procedure (SOP) detailing invocation plans, role definitions, and necessary system changes for brokers and Clearing Corporations. This SOP must be submitted to SEBI within 60 days.
Stock exchanges and Clearing Corporations are directed to establish infrastructure, amend relevant rules, and ensure compliance with these measures by April 1, 2025. The circular aims to enhance market resilience and safeguard investor interests by ensuring seamless operations even during technical disruptions.
[Notification No. SEBI/HO/MRD/TPD/P/CIR/2024/167]
