Technology a tiger everyone is riding: NSE chief

Chitra Ramkrishna

As technology becomes one of the mainstays of growth in securities market, top exchange NSE's chief Chitra Ramkrishna feels that any new products and systems should not be at the cost of technology-related risks.

"Technology is a tiger that everyone is riding. You have no choice. You have to move ahead and continuously benchmark your technology, otherwise you will become irrelevant.

"But, benchmarking the technology would not just enforce speed, performance and functionality. It also brings in certain risks. Everyone in exchange business across the world is actually on a high gear on risk mitigation," the CEO and Managing Director of the National Stock Exchange (NSE) said.

Asked whether technology is a boon or bane for the securities markets, Ramkrisha said there were no "short sweet answers" to this.

While use of technology has been one of the major driving forces for the growth of NSE and many other exchanges across the world, various risks posed by technology have also become a major headache for regulators and trades based on technological advances have been often blamed for some major problems in this business.

As a result, capital market regulators across the world have been exploring ways to strike a balance between benefits and risks from the use of latest technology in trading. However, such risks have been minimal in India, given a robust regulatory framework in place.

According to a Sebi discussion paper, adoption of various technological advancements in the Indian securities market has transformed the way trading takes place. This, in turn, resulted in the process becoming easier, faster, transparent, and safer for the investors.

However, adoption of technological advancements has also brought to fore certain new challenges for market participants, investors and regulators, Sebi has said.

"Everyone is researching and everyone is exploring. Someone may be more paranoid and someone may be less paranoid. Some of us may be forced by regulators to do something and some of us may do it proactively. This is the only difference," Ramkrishna told PTI in a candid interview.

"For us in India, the good thing is that the regulators from the very beginning have stressed in our mind very clearly that when it comes to technology, risk management or any such thing, we will not compromise on regulatory side for products.

"This means that just because market wants some new products, we will not do it at the cost of diluting any risk for technology. The same thing will go for bringing in safeguards for risk mitigation and technology," she added.

The NSE chief further said, "It is like security and you never know whether it is adequate or not. You hope it is adequate. We are continuously scanning the environment and seeing if there is something else somewhere else that you can adapt to strengthen the system."

"The focus is always to strengthen the existing system," she observed.