Sebi Proposes Cyber Security Boost
India's market regulator seeks to extend IT and cyber security framework to subsidiaries of Market Infrastructure Institutions, with public comments invited until October 2
The Securities and Exchange Board of India (Sebi) has proposed extending the IT and cyber security framework of Market Infrastructure Institutions (MIIs) to their subsidiaries. This move aims to ensure the regulatory framework remains aligned with the evolving market structure as MIIs diversify their business models through subsidiaries.
The proposal includes the requirement for MIIs to provide details of compensatory controls to ensure cyber and IT resilience. Additionally, the views of the Standing Committee on Technology (SCOT) and the board of the MIIs must be included in exemption proposals.
Sebi has sought public comments on the proposal until October 2. The regulator has outlined that the IT and cyber security framework applicable to the parent MII will not apply to the subsidiary if the arm does not meet certain criteria. MIIs can seek exemption from Sebi regarding not extending the IT and cyber framework to a subsidiary, provided they follow the prescribed steps.
## What's at Stake The move comes as MIIs continue to diversify their business models through subsidiaries, which may need to operate in close coordination with the parent MII and might use shared technology infrastructure, applications, market data or other critical IT resources. Extending the applicability of the framework would ensure that the regulatory framework remains aligned with the evolving market structure.
## Why it Matters The proposed extension of the IT and cyber security framework is crucial in today's digital age, where cybersecurity threats are becoming increasingly common. By ensuring that subsidiaries of MIIs adhere to the same IT and cyber security standards as their parent companies, Sebi aims to protect the integrity of the market infrastructure and maintain investor confidence.
The public comment period, which ends on October 2, provides an opportunity for stakeholders to provide feedback on the proposal. The final outcome of this consultation will have significant implications for the Indian securities market, as it seeks to balance regulatory oversight with the need for innovation and growth in the market infrastructure sector.
