Sebi directs commodity bourses to frame disaster recovery policy

Capital markets regulator Sebi on Monday asked commodity derivatives exchanges to put in place a disaster recovery policy to preserve data and ensure transaction integrity.

They have been directed to submit their policy in this regard along with a detailed plan of action for implementation by April 1, 2016.

The move comes after erstwhile commodity markets regulator FMC (Forward Market Commission) got merged with Sebi (Securities and Exchange Board of India) on September 28. “While technological developments and innovations bring efficiency to the markets, they may also pose certain risks to the stability and integrity of the markets, if not identified and managed effectively,” Sebi said in a circular. “Further, any events of disaster will disrupt trading systems adversely, thereby impacting the market integrity and the confidence of investors,” it added.

The markets regulator has directed commodity exchanges to put in place a robust Business Continuity Plan (BCP) and Disaster Recovery (DR) policy to ensure continuity of operations. 

Also, these exchanges will have to conduct annual system audit as per the prescribed audit framework which includes, audit process, auditor selection norms and audit report guidelines.