2 weeks Ago By Charu Singh
Market regulator Securities and Exchange Board of India is exploring tweaks in the norms for technical glitch disclosures that are followed by brokerage firms, as per three sources that NDTV Profit spoke to. The regulator is looking at proposals of bringing some ease in making these disclosures, people in the know said."This is a highly technical subject and continuous dialogue and discussion are going on with regulators by the market participants," said one of the sources quoted above.
A technical glitch stands for any issue in the story broker systems, be it in the hardware, software, networks, processes or any products or service in electronic form. This could also be due to a handful of reasons such as cyber attacks, inadequate infrastructure or any variance from the normal course of operations. As per the mandated reporting requirements, brokerages are supposed to report any such technical glitch issue to the stock exchanges immediately but not later than an hour from the occurrence.
In addition to this, they have to submit a preliminary report within T+1 day where T stands for the day of the glitch.Meanwhile, a root cause report with more profound details is supposed to be submitted within 14 days of the glitch. To prevent glitches, brokers have to ensure their systems can handle at least 1.
5 times the highest peak load in a quarter. They are also required to monitor real-time system usage and set up alerts if it exceeds 70 percent of capacity. All software changes undergo rigorous testing before deployment, including automated testing, security checks, and change management processes.
Stock exchanges also monitor brokers’ systems' health through an API-based system to detect and mitigate glitches at an early stage. Large brokers have to establish a backup site at least 250 kilometers away from the primary site to ensure business continuity and quick recovery in case of major failures.This isn't the only proposal aimed at easing the norms for brokerage firms.
Recently, it was reported that SEBI is mulling on a 'one event, one penalty' rule for brokers such that a firm does not face multiple fines for the same violation. SEBI Proposes Limiting Derivatives Expiry To Tuesdays Or Thursdays. Read more on Markets by NDTV Profit.
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