 "SEBI")
The unavailability of the RMS poses a major risk to the continuity of stock exchanges.
To strengthen the business continuity framework of clearing companies to manage major software malfunctions, Sebi on Wednesday asked them to establish their critical risk management systems (RMS) using a software-as-a-service (SaaS) model ).
RMS plays an important role in ensuring the smooth and uninterrupted functioning of the securities market by carrying out online and real-time risk management of stock transactions.
The unavailability of the RMS poses a major risk to the continuity of stock exchanges.
In the first phase, the systems would be designed to provide an additional tool for business continuity in case of issues with the RMS of clearing companies, Sebi said in a circular.
“In order to better manage disruptions impacting the availability of RMS, it is proposed to implement another contingency measure under the Software as a Service (SaaS) model,” Sebi said.
The first phase framework would work for the existing interoperable segments of CCs – spot market, equity derivatives segment, currency derivatives.
“Each clearing firm must design a system to execute its RMS-related operations and manage transaction risks for its clearing members, using the RMS-related software components of another CC. This instance would be called SaaS-RMS,” Sebi said.
The regulator said the clearing firm would make a decision to move its operations to SaaS-RMS within 30 minutes of its failure to carry out real-time, online risk management of transactions at its operating venue.
Within 30 minutes, all related activities such as sending violation messages to exchanges, informing portal details for interacting with SaaS-RMS to Clearing Members will be enabled through SaaS-RMS.
A simulated SaaS-RMS session will be organized at least once per quarter to familiarize and train members.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First publication: December 20, 2023 | 10:47 p.m. STI
