The Securities and Exchange Board of India (SEBI) has come out with the new guidelines after taking into account the recommendations of its technical advisory committee.
As trade volumes rise in the stock exchanges, markets regulator Sebi today asked despositories to remain prepared and enhance system capacity to at least 1.5 times of the projected peak load. The Securities and Exchange Board of India (SEBI) has come out with the new guidelines after taking into account the recommendations of its technical advisory committee.
Over the years, despositories have experienced a surge in volumes as markets have grown. In a circular, Sebi has directed despositories to enhance trading, clearing, settlement and risk management related infrastructure capacity to “at least 1.5 times of the projected peak load”.
The projected peak load would be calculated for the next 60 days based on the per hour peak load trend of the past 180 days.
The depositories would have to ensure utilisation of resources in such a manner so as to achieve work completion in 70 per cent of the allocated time.
All systems pertaining to depository operations would be considered in this process including all technical components such as network, hardware, software, among others and would be adequately sized to meet the capacity requirements. In case the actual capacity utilisation exceeds 75 per cent of the installed capacity for a period of 15 days on a rolling basis, immediate action would be taken to enhance the capacity.
The actual capacity utilisation would be monitored especially during the period of the day in which pay-in and pay-out of securities take place for meeting settlement obligations.
The new norms have been put in place in view of depositotries’ importance in the smooth functioning of the securities market.
The depositories have been asked to put in place necessary systems for implementation of the circular within three months.
Furthermore, they have been asked to implement suitable mechanisms, including generation of appropriate alerts, to monitor capacity utilisation on a real-time basis and proactively address issues pertaining to their capacity needs.