The Securities and Exchange Board of India (Sebi) has proposed shortening disaster recovery drills for market infrastructure institutions (MIIs) to at least four hours, while introducing tighter operational resilience and data recovery requirements. According to The Economic Times, the proposed framework requires MIIs to conduct DR drills on a non-working day, starting operations at the primary data centre (PDC) and switching over to the disaster recovery site (DRS). The four-hour session would include the switchover between the two sites, as reported by The Economic Times. The regulator noted that "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." At present, the framework requires MIIs to conduct DR drills for one full trading day and demonstrate an intraday shift from the PDC to the DRS.
Sebi has proposed strengthening resilience at the PDC through comprehensive stress and mock testing covering not just transaction volumes and orders per second, but also various masters, table sizes and other non-transactional components. As reported by The Economic Times, MIIs would additionally have to regularly test the fault tolerance of their PDC and DRS to ensure redundant components automatically take over in the event of a failure. They would be required to proactively identify, document and monitor boundary conditions and upper limits relating to databases, configurations, table sizes and counter limits to identify potential system bottlenecks before they affect operations. The regulator also proposed adequate logging of application and component-level errors, along with a ready reckoner for interpreting such errors to speed up troubleshooting during disruptions. According to The Economic Times, MIIs should need to conduct periodic tests and maintain alerts for component- and application-level controls and configurations across their PDC, near site (NS) and DRS to ensure there is no configuration drift.
Under the proposed framework, MIIs would be required to cover all scenarios of market operations during the drill and simulate real-life load and participation levels as closely as possible. As reported by The Economic Times, the regulator proposed that MIIs test various disruption scenarios as part of the switchover exercise, with a comprehensive list of such scenarios to be reviewed by their Standing Committee on Technology (SCOT). The proposals are aimed at strengthening the business continuity plan (BCP) and disaster recovery framework of MIIs, comprising stock exchanges, clearing corporations and depositories. The measures are intended to strengthen operational resilience while easing compliance, with public comments invited until October 5 for the original framework.
On September 11, 2026, Sebi issued a Consultation Paper extending the IT and Cyber Security Framework applicable to Market Infrastructure Institutions (MIIs) to their subsidiaries. According to TeamLease RegTech, the framework covers subsidiaries that perform activities directly contributing to the MII's regulated domain, handle data the MII is responsible for, or share IT infrastructure with the MII. Covered subsidiaries would be required to comply with requirements relating to cybersecurity, system audits, incident reporting, BCP-DR and technology governance. Subsidiaries not meeting these criteria would be exempt, while those sharing only IT infrastructure may seek SEBI exemption by demonstrating adequate compensatory controls and obtaining views of their SCOT and Board.
For stock exchanges, Sebi has proposed a new mechanism to recover lost trade data from clearing corporations if a disruption also affects replication at the near site or DRS. As reported by The Economic Times, exchanges and clearing corporations would have to put standard operating procedures in place for such recovery. The regulator stated that stock exchanges shall put in place a framework to recover the lost data from the CCs in case of disruption, with stock exchanges and clearing corporations needing to establish the necessary standard operating procedures. The proposals aim to ease the conduct of DR drills while strengthening the operational resilience of MIIs, with public comments invited until October 5 for the original framework.
