Coming out with fresh guidelines, Sebi on Monday asked market infrastructure institutions to begin operations from disaster recovery sites within 45 minutes of a disruption to critical systems, including trading.
The directive comes against the backdrop of a technical glitch at the National Stock Exchange (NSE) on February 24 that halted trading for nearly four hours.
In a statement, Sebi asked the governing board of NSE to determine why the bourse's management failed to shift its operations from primary site to Disaster Recovery (DR) site within the time frame specified by the regulator and also fix individual responsibilities for the same.
This should be completed within 21 days, Sebi said.
On February 24, trading activity was halted at 11.40 am on the NSE and the exchange made an announcement with respect to re-opening of the markets to its members at 3.17 pm.
In addition, NSE or NSE Clearing Ltd (NCL) have been advised to implement within 90 days functionality of updation of collaterals at the slave system of NCL placed at data center of BSE/MSEI and connect trading system at primary site of NSE to the slave system of NCL placed at data center of BSE/MSEI.
Separately, the exchange attributed the trading disruption to telecom links as well as SAN (Storage Area Network) system failure.
The National Stock Exchange (NSE) presented its detailed root cause analysis with regard to the trading halt before Sebi's Technical Advisory Committee on Monday.
The committee, after due deliberations, has come out with the new framework for all Market Infrastructure Institutions (MIIs) -- stock exchanges, clearing corporations and depositories.
Under the framework, unannounced live trading session need to be conducted from DR site of the MIIs with a notice of four hours from Sebi before the start of the trading session, starting from April 2021, Sebi said.
It, further, said unannounced live trading session would be conducted from DR site of the MIIs with a short notice of 45 minutes from the regulator before the start of the trading session, starting from July 2021.
"In the event of disruption in the 'critical systems' of the MII, the MII shall declare that incident as 'Disaster' within 30 minutes of incident (earlier 2 hours) and take measures to restore operations including from DRS within 45 minutes (earlier 2 hours) from the declaration of 'disaster'," Sebi said.
Further, MIIs need to study the feasibility of intra-day shifting from primary Site to DR site with a notice of 45 minutes from Sebi.
Critical systems for an exchange or clearing corporation would include trading, risk management, collateral management, clearing and settlement and index computation while critical systems'' for a depository shall include systems supporting settlement process and inter-depository transfer system.
MIIs have to ensure that the Recovery Point Objective (RPO) -- the maximum tolerable period for which data might be lost due to a major incident -- would be 15 minutes.
Sebi asked MIIs to prepare comprehensive testing plan and build sufficient redundancy in its systems in order to mitigate impact of any unforeseen technical glitch and to ensure failure of any subsystem of MIIs would not impact other their critical systems and continuous functioning of securities market.
MIIs need to constantly monitor the health or performance of various communication links and take corrective measures, as required.
All MIIs have to incorporate clear and comprehensive communication Protocols and procedures in Business Continuity Plan or BCP document for both internal and external communications from the time of incident till the rectification or resumption of systems or trading.
The new guidelines should be implemented within 90 days, the Securities and Exchange Board of (India) said.