Sebi mulls tightening IT norms for commodity exchanges. Here are 4 things proposed by regulator

In a major move to bolster the technological backbone of India’s commodity derivatives markets, the Securities and Exchange Board of India (Sebi) on Monday issued a draft circular proposing sweeping revisions to capacity planning and real-time performance monitoring guidelines for stock exchanges and clearing corporations operating in the commodity derivatives segment.

Currently, commodity exchanges are required to maintain trading systems with a capacity at least four times their peak order load, but lack uniform, detailed guidelines for capacity planning and performance monitoring akin to those already in place for equity exchanges.

Recognising this gap and responding to representations from commodity exchanges, Sebi, after consultations with its Technical Advisory Committee (TAC), has proposed harmonising rules across asset classes.

Here’s what Sebi has proposed:

1) The draft circular mandates that critical IT systems of exchanges and clearing corporations must have installed capacity at least twice (2x) the projected peak load, calculated based on the past six months’ sustained peak activity and anticipated future growth.

2) Sebi has proposed extension of guidelines prescribed for planning and real time performance for equity exchanges in accordance with December 10, 2024 to be extended to commodity derivative exchanges.3) In order to bring uniformity between stock exchanges and clearing corporations with commodity derivatives segments, the market watchdog has also suggested that guidelines for capacity planning and real time performance should also be made applicable for Clearing Corporations with Commodity Derivatives Segment.4) Further, SEBI’s proposal calls for comprehensive, automated real-time monitoring of critical IT components, including hardware, network, and software systems, with predefined thresholds triggering alerts. Exchanges must set clear SOPs for resolving these alerts swiftly, and if any IT component exceeds 75% utilisation, immediate corrective action will be mandatory.

Public comments on the draft guidelines are invited until July 20, 2025.

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