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Now, stock exchanges, clearing corporations and depositories Will Have To Spend For Technical Glitches

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Failure to deal with glitches will bring in a charge of Rs 200,000 per day for very first 15 working daysThe Securities and Exchange Board of India (Sebi) has made it mandatory for institutions and their authorities to spend for failure to provide services.

Market infrastructure organizations (MIIs), consisting of stock exchanges, clearing corporations and depositories will be responsible for technical problems in a relocation that will motivate MIIs to continuously keep an eye on the performance and effectiveness of their systems and upgrade/enhance them, Sebi stated.

The brand-new rules enter effect from August 16.

Technical glitches include malfunctioning in hardware, software or any product or services supplied by market facilities organizations, Sebi clarified in its circular.

MIIs are systemically crucial organizations as they provide infrastructure essential for the smooth and undisturbed performance of the securities market ...

For any downtime or unavailability of services, beyond such predefined time, there is a requirement to make sure that a 'financial disincentive' is paid by MIIs along with their handling directors (MDs) and chief technology officers (CTOs), Sebi stated in a circular.A thorough origin analysis (RCA) report, laying out the reasons for a technical glitch, will have to sent to Sebi within 21 days of an incident.

The marketplace facilities institutions will need to pay Rs 1,00,000 daily in case of delayed or insufficient submission of this report.A failure on the part of market facilities institutions to attend to the technical glitches will attract a penalty of Rs 200,000 per day for the very first 15 working days, Rs 300,000 each day for the next 15 working days and Rs 25 lakh thereafter, Sebi said.If the concerned institution fail to bring back typical operations within 75 minutes, other than in cases where business interruption has been declared as a catastrophe , they will have to pay a charge of Rs 50 lakh and if the disruption extends beyond 3 hours, the penalty will be Rs 1 crore, Sebi added.It may be recollected that trading was stopped on the NSE on February 24 due to a technical problem that avoided updation of live price quotes of the Nifty and Bank Nifty indexes.




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