July 6, 2021 01:37 PM
The Securities and Exchange Board of India (Sebi) on Monday issued a detailed framework for penalising market infrastructure institutions (MIIs), Sebi Announces New rules to make bourses pay for technical glitches; which include stock exchanges, clearing corporations, and depositories, for technical glitches.
“MIIs are systemically important institutions as they provide infrastructure necessary for the smooth and uninterrupted functioning of the securities market….For any downtime or unavailability of services, beyond such predefined time, there is a need to ensure that a ‘financial disincentive’ is paid by MIIs as well as their managing directors (MDs) and chief technology officers (CTOs),” the market regulator said in a circular.
Sebi said the move would encourage MIIs to constantly monitor the performance and efficiency of their systems and upgrade them. This would avoid any possibility of technical glitches, disruptions, or disasters, and help them restart their operations expeditiously in the event of any such incident, it added.
Under the new framework, MIIs will have to pay Rs 1,00,000 per day in case of a delay in submission or incomplete submission of their root cause analysis (RCA). The regulator has said a comprehensive RCA report needs to be submitted within 21 days of the incident.
Sebi Announces New rules to make bourses pay for technical glitches; Failure to timely address the technical glitch will attract Rs 200,000 per day for the first 15 working days, Rs 300,000 per day for subsequent 15 working days, and Rs 25 lakh additional beyond that.