Sebi, exchanges meet to beef up systems post 3-hour technical glitch at NSE

Suggestions were sought on the exchange's preparedness for technical glitches, cyber threats

The Securities and Exchange Board of India (Sebi) has called for a meeting of stock exchanges on Friday to discuss beefing up of systems and process following the three-hour technical glitch at National Stock Exchange (NSE) earlier this month.

This would be the first meeting of newly-constituted Sebi panel on cyber security aimed at safeguarding capital markets against technical glitches and cyber-attacks. The four-member panel, set up in May, is headed by Sebi's whole-time member Madhabi Puri Buch, Executive Director S V Muralidhar Rao and other information technology (IT) experts.

Sources said that exchanges were asked to give representation on the overall risk management and their preparedness to ensure prudent response as well as corrective measures for any technical glitch or cyber threat.

On July 10, NSE suffered one of its worst-ever technical glitch, forcing the exchange to stop trading for over three hours as stock prices could not be updated.

"Due to technical reasons in the cash market, trading has been stopped in cash and the futures and options (F&O ) segment of the NSE," said the exchange in a statement.

Market regulator and exchanges may discuss new processes to follow in case of a similar event in future. Sebi may also suggest some measures to maintain cyber resilience requirements aligned with global best practices and industry standards in accordance with the need of the domestic capital market structure, said a person in the know.

Sebi had, in July 2015, issued a set of guidelines for the stock exchanges and other market infrastructure institutions (MIIs) to safeguard their systems. Sebi had said MIIs need to have a robust cyber security framework to provide essential facilities and perform systemically critical functions relating to trading, clearing and settlement in the securities market. Despite this, regulator witnessed issues with the exchange systems. Hence, it wants to ensure proper governance, monitoring and detection, responses and recovery and periodic audit by the exchanges, added the source.