Outsourcing of activities, Business Continuity Plan (BCP) and Disaster Recovery (DR) and Cyber Security and Cyber Resilience framework – Limited Purpose Clearing Corporation (LPCC)

Last updated: 07 November 2020

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This circular outlines the framework for Limited Purpose Clearing Corporation (LPCC) activities, including outsourcing, Business Continuity Planning (BCP), Disaster Recovery (DR), and Cyber Security. It permits the LPCC to enter into outsourcing agreements with existing Clearing Corporations for IT support, clearing, and settlement of repo transactions in debt securities. The circular also details requirements for BCP/DR and cyber security arrangements, ensuring regulatory compliance and market stability.

Securities and Exchange Board of India CIRCULAR SEBI/HO/MRD2/DCAP/CIR/P/227 November 06, 2020 To, All Recognized Stock Exchanges All Recognized Clearing Corporations Dear Sir / Madam, Sub: Outsourcing of activities, Business Continuity Plan (BCP) and Disaster Recovery (DR) and Cyber Security and Cyber Resilience framework Limited Purpose Clearing Corporation (LPCC) 1. The broad guidelines governing outsourcing of activities by Clearing Corporations have been prescribed

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FAQ :

This circular provides a framework for the Limited Purpose Clearing Corporation (LPCC) regarding outsourcing of activities, Business Continuity Plan (BCP), Disaster Recovery (DR), and Cyber Security and Cyber Resilience.

The LPCC is permitted to outsource core and critical IT support infrastructure and activities, including transaction processing, clearing, and settlement, to existing Clearing Corporations.

The LPCC can arrange for BCP and DR mechanisms with existing Clearing Corporations that comply with regulatory requirements. The LPCC remains liable for any issues arising from these arrangements.

The LPCC is allowed to have outsourcing arrangements for cyber security with existing Clearing Corporations to comply with the prescribed framework. The LPCC is liable for any disputes arising from these arrangements.

The LPCC generally holds overall responsibility and liability for outsourced activities, BCP/DR, and cyber security arrangements, even if specific liabilities may be contractually passed on to service providers.

The LPCC is established for clearing and settling repo transactions in debt securities, specifically mentioning corporate bonds for execution.