Sebi proposes shorter disaster recovery drills for market infra

Mumbai: The Securities and Exchange Board of India on Tuesday proposed shortening the mandatory disaster recovery (DR) drills for market infrastructure institutions (MIIs) to at least four hours from the existing requirement of conducting these mock exercises for an entire trading day.

Under the proposed framework, MIIs - including stock exchanges, clearing corporations and depositories - would conduct DR drills on a non-working day, starting operations at their primary data centre and switching over to the disaster recovery site.

The four-hour session would include the switchover between the two sites.


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"In light of representation received from stock exchange with commodity derivatives segment wherein the trading day goes on till 11:55 pm for certain trading products, it is noted that conducting DR drills for whole of market hours could be cumbersome for market participants as well as MIIs," Sebi said in a consultation paper.

The regulator also proposed to strengthen the operational resilience of MIIs. It suggested comprehensive stress testing covering not only transaction volumes and orders per second, but also master data, database and table sizes and other non-transactional components.

MIIs would have to regularly test the fault tolerance of their primary data centre and disaster recovery site to ensure redundant servers, switches and other components automatically take over if a system component fails.

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The regulator proposed that MIIs proactively identify and monitor system limits, including database, configuration, table size and counter limits, to detect potential bottlenecks before they affect operations.

They would also need stronger application-level error logging and a ready reckoner to help interpret errors and speed up troubleshooting during disruptions.

For stock exchanges, Sebi proposed a framework to recover lost trade data from clearing corporations if a disruption affects replication at the exchange's near site or DRS. It sought public comments on the proposals by October 5.