SOP for handling of technical glitches by MIIs

Last updated: 09 July 2021

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The Securities and Exchange Board of India (SEBI) has issued a new circular outlining a Standard Operating Procedure (SOP) for Market Infrastructure Institutions (MIIs) to manage technical glitches. This SOP includes clear guidelines for reporting issues, conducting root cause analysis, and implementing corrective actions. It also introduces a structure for 'Financial Disincentives' for MIIs, their Managing Directors, and Chief Technology Officers if these procedures are not followed or if disruptions exceed defined timelines.

Securities and Exchange Board of India CIRCULAR SEBI/HO/MRD1/DTCS/CIR/P/2021/590 July 05, 2021 To, All Stock Exchanges All Clearing Corporations All Depositories, Dear Sir/ Madam, Sub.: Standard Operating Procedure for handling of technical glitches by Market Infrastructure Inst

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FAQ :

A technical glitch is defined as any malfunction in an MII's systems, including hardware, software, or services provided, which may lead to a stoppage or variance in normal operations.

For business disruptions, MIIs must report the technical glitch to SEBI immediately but no later than 2 hours from occurrence. A preliminary report is due within 24 hours, and a comprehensive Root Cause Analysis (RCA) report within 21 days.

Financial disincentives are penalties imposed on MIIs, their Managing Directors, and Chief Technology Officers for failing to adhere to the SOP, such as delays in reporting, submitting inadequate RCAs, or failing to restore operations within prescribed timelines.

The amounts paid as financial disincentives by MIIs are credited to the Investor Protection Fund (IPF) or the Core Settlement Guarantee Fund (Core SGF) maintained by the respective MII.

This circular and the associated SOP for handling technical glitches will come into effect from August 16, 2021.