Sebi asks bourses to improve risk management to tackle volume

New Delhi: Sebi on Thursday asked bourses and clearing corporations to enhance trading, clearing, settlement and risk management systems to at least 1.5 times of the projected peak load as trade volumes soar at stock exchanges.

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, bourses and clearing corporations have experienced an increase in volumes as markets have grown.

In a circular, Sebi has directed stock exchanges and clearing corporations 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 will be calculated for the next 60 days based on the per-second peak load trend of the past 180 days.

All systems in trading, clearing and settlement ecosystem will be considered in this process, including all technical components such as network, hardware, software, and will be adequately sized to meet capacity requirements.

In case the actual capacity utilisation exceeds 75 percent of the installed one, immediate action will be taken to enhance it.

They 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 will proactively address issues pertaining to their capacity needs.

The existing policy has been in place since 2008.

Under the existing norms, the per-half-hour capacity of the computers and the network should be at least 4-5 times of the anticipated peak load in any half an hour or of the actual peak load seen in any half an hour during the preceding six months.