Securities and Exchange Board of India
Press Releases No. 13/2021
1. With regard to the Trading halt at NSE on February 24, 2021, NSE presented its detailed Root Cause Analysis (RCA) before SEBI Technical Advisory Committee (TAC) on March 22, 2021.
2. TAC, after due deliberations, inter-alia, decided the following:
a) Unannounced live trading session shall be conducted from DR site of the MIIs with a notice of 4 hours from SEBI before the start of the trading session, starting from April 2021.
b) Unannounced live trading session shall be conducted from DR site of the MIIs with a short notice of 45 minutes from SEBI before the start of the trading session, starting from July 2021.
c) In the event of disruption in the ‘Critical Systems’ of the MII, the MII shall, declare that incident as ‘Disaster’ within 30 minutes of incident (earlier 2 hours) and take measures to restore operations including from DRS within 45 minutes (earlier 2 hours) from the declaration of ‘Disaster’.
d) MIIs shall study the feasibility of intra-day shifting from Primary Site to DR site with a notice of 45 minutes from SEBI.
e) MIIs shall prepare comprehensive testing plan and build sufficient redundancy in its systems in order to mitigate impact of any unforeseen technical glitch and to ensure failure of any subsystem of MIIs would not impact other critical systems of MIIs and continuous functioning of securities market.
f) MIIs shall constantly monitor the health/performance of various communication links and take corrective measures, as required
3. With a view to further strengthening the systems to ensure faster restoration of operations in case of any Disaster/ Technical Glitch, SEBI has issued a Circular dated March 22, 2021, to implement, inter-alia, the following measures:
a) All MIIs to check switchover functionality by conducting Unannounced Live Trading from DR site of the MII with a short notice of 45 minutes.
b) In the event of disruption of any one or more of the ‘Critical Systems’ (as defined below), the MII shall, within 30 minutes of the incident (from earlier requirement of 2 hrs), declare that incident as ‘Disaster’ and take measures to restore operations including from DRS within 45 minutes (from earlier requirement of 2 hrs) of the declaration of ‘Disaster’. Accordingly, the Recovery Time Objective(RTO)- the maximum time taken to restore operations of ‘Critical Systems’ from DRS after declaration of Disaster- shall be 45 minutes. ‘Critical Systems’ for an Exchange/ Clearing Corporation shall include Trading, Risk Management, Collateral Management, Clearing and Settlement and Index computation. ‘Critical Systems’ for a Depository shall include systems supporting settlement process and inter-depository transfer system.
c) Recovery Point Objective (RPO), the maximum tolerable period for which data might be lost due to a major incident, has been reduced to 15 minutes from existing 30 minutes.
d) All MIIs have to incorporate clear and comprehensive Communication Protocols and procedures in BCP document for both internal and external communications from the time of incident till the rectification/resumption of systems/trading of MIIs.
e) The above measures to be implemented within 90 days.
4. NSE/NCL have been advised to implement within 90 days:
a) Functionality of updation of collaterals at the slave system of NCL placed at data center of BSE/MSEI.
b) Connect trading system at primary site of NSE to the slave system of NCL placed at data center of BSE/MSEI.
5. Further, SEBI has advised the Governing Board of NSE to:
a) Determine why the NSE management failed to shift NSE’s operations from Primary site to DR site within the time frame specified by SEBI.
b) Fix individual responsibilities for the same.
c) Above to be completed within 21 days.
March 22, 2021