India regulator fines exchanges for not acting quickly in the event of disruption

MUMBAI (Reuters) – Indian exchanges that fail to respond to technical glitches and restore operations within 45 minutes will face stiff penalties, the market regulator said, months after a shutdown at the country’s largest stock exchange sparked panic among led investors.

The announcement late on Monday comes after the National Stock Exchange (NSE) went offline for nearly four hours in February, leaving investors clueless when trading would resume and angering brokers forced to sell holdings.

The Securities and Exchange Board of India (SEBI) said in its announcement that exchanges, clearing companies, custodians and their senior management will be fined for failing to promptly resolve issues or submit root cause analyzes within 21 days.

An entity that does not declare the disruption of critical systems a disaster within 30 minutes and does not restore operations within 45 minutes will in any case be fined 20 million rupees ($269,070) or 10% of the average of the two previous financial statements. year net profit, whichever is higher, SEBI said.

The entity’s director and chief technology officer will also be fined 10% of annual salary, the regulator said.

The sanctions will encourage entities to constantly monitor the performance and efficiency of their systems and prevent or quickly address disruptions, SEBI said.

In February, during the close of the NSE, some brokers said a lack of prompt information about when and whether trading would resume prompted them to close intra-day stock positions on another exchange, causing significant loss for some investors. led.

NSE said it acted in accordance with standard practices.

($1 = 74,3300 Indian rupees)