India's capital markets regulator, the Securities and Exchange Board of India (Sebi), is taking a proactive step to future-proof the country's stock exchanges. Chairman Tuhin Kanta Pandey announced on Saturday that Sebi plans to form a dedicated working group. This group's mission will be to identify the next technological frontier for Indian bourses over the coming five to ten years.
Charting the Course for a Decade
Pandey made the announcement while speaking to reporters on the sidelines of the 11th International Convention of the Commodity & Capital Participants Association of India (CPAI). He stated that the proposed group will not only look at how exchange technology should evolve but will also benchmark global best practices. The ultimate goal is to suggest innovative approaches to enhance the entire market system infrastructure.
"We are going to constitute a working group on how it is going to be our next technological frontier in our stock exchanges," Pandey said, as reported by PTI. He elaborated that this "technological frontier" encompasses the use of cutting-edge tools to achieve three core objectives: improved market oversight, greater operational efficiency, and stronger investor protection.
Zero Tolerance for Technical Glitches
The Sebi chairman underscored that technological robustness is a critical priority for the regulator. He emphasized that Sebi treats every exchange-related technical malfunction with the utmost seriousness. While acknowledging that disruptions can occur in a fast-paced tech environment, Pandey stressed the need for implementing even stronger safeguards.
To address technical flaws systematically, exchanges are mandated to conduct detailed root-cause analyses following any incident. They must then submit comprehensive standard operating procedures (SOPs) along with corrective action plans to the regulator for review.
Systemic Review and Penalties
Responding to a specific query about the recent outage at the Multi Commodity Exchange (MCX), Pandey outlined Sebi's clear process for handling such events. He confirmed that the regulator follows a defined protocol whenever a technical issue arises at an exchange. This includes the imposition of strict financial penalties if the disruption exceeds specified severity thresholds.
Beyond individual incidents, Pandey revealed that Sebi is also examining these glitches from a broader, systemic perspective. "By identifying commonalities in these glitches, we aim to understand how we can better secure and strengthen our market technology," he explained. This holistic view is intended to fortify the entire market ecosystem against future vulnerabilities.
The formation of this working group signals Sebi's commitment to ensuring that India's market infrastructure not only keeps pace with global technological advancements but also sets a benchmark for security, efficiency, and resilience in the years to come.
