TaxTMI 
TaxTMI 
Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems
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....s major technology related risk. Considering the growing number of such incidents, SEBI constituted a working group to recommend suitable measures to address the issue. Based on the recommendations of working group and views obtained from stakeholders & industry experts, it has been decided to put in place the following framework to deal with technical glitches occurring in the trading systems of stock brokers. 2. Definition of Technical Glitch: 2.1 Technical glitch shall mean any malfunction in the systems of stock broker including malfunction in its hardware, software, networks, processes or any products or services provided by the stock broker in the electronic form. The malfunction can be on account of inadequate Infrastructure / ....
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....ommon email address for reporting across all stock exchanges. 3.6 All technical glitches reported by stock brokers as well as independently monitored by stock exchanges, shall be examined collectively by the stock exchanges along with the report/RCA and appropriate action shall be taken. 4. Capacity Planning: 4.1 Increasing number of investors may create additional burden on the trading system of the stock broker and hence, adequate capacity planning is prerequisite for stock brokers to provide continuity of services to their clients. Stock brokers shall do capacity planning for entire trading infrastructure i.e. server capacities, network availability, and the serving capacity of trading applications. 4.2 Stock brokers shall mo....
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....mework for carrying out software related changes / testing in their systems: 5.2 Stock brokers shall create test driven environments for all types of software developed by them or their vendors. Regression testing, security testing and unit testing shall be included in the software development, deployment and operations practices. 5.3 Specified stock brokers shall do their software testing in automated environments. 5.4 Stock Brokers shall prepare a traceability matrix between functionalities and unit tests, while developing any software that is used in trading activities. 5.5 Stock brokers shall implement a change management process to avoid any risk arising due to unplanned and unauthorized changes for all its information secu....
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....in stock brokers' trading systems. The cell also shall intimate the specified stock broker concerned immediately about the breach of the key parameters monitored under LAMA. 6.4 Stock brokers and stock exchanges shall preserve the logs of the key parameters for a period of 30 days in normal course. However, if a technical glitch takes place, the data related to the glitch, shall be maintained for a period of 2 years. 7. Business Continuity Planning (BCP) and Disaster Recovery Site (DRS): 7.1 Stock brokers with a minimum client base across the exchanges, as may be specified by stock exchanges from time to time, shall mandatorily establish business continuity/DR set up. 7.2 Stock brokers shall put in place a comprehensive BCP-DR p....
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....d associated application environments of DRS and PDC shall have one-to-one correspondence between them. Adequate resources shall be made available at all times to handle operations at PDC or DRS. 7.7 Stock exchanges in consultation with stock brokers shall decide upon Recovery Time Objective (RTO) i.e. the maximum time taken to restore operations from DRS after declaration of Disaster and, Recovery Point Objective (RPO) i.e. the maximum tolerable period for which data might be lost due to a major incident. 7.8 Replication architecture, bandwidth and load consideration between the DRS and PDC shall be within stipulated RTO and the whole system shall ensure high availability, right sizing, and no single point of failure. Any updates mad....
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.... 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. 12. This circular is available on SEBI website at www.sebi.gov.in under the categories "Legal Framework" and "Circulars". 13. This circular shall come into effect from April 01, 2023. Yours faithfully, Vishal M Padole Deputy General Manager MIRSD Tel. No: 022 26449247 Email ID: [email protected] Annexure I Root Cause Analysis Form/ RCA 1. Letter / Report Subject :- Name of the stock Broker: Exchange Name and Code: SEBI Registration number: 2. Designated Officer and/or Reporting Officer de....