SEBI proposes shorter DR drills, stronger resilience for market infrastructure

India's securities regulator, SEBI, has proposed changes to disaster recovery (DR) drills and operational resilience standards for market infrastructure institutions (MIIs). These proposals aim to improve business continuity planning and data recovery mechanisms. Under the new framework, DR drills would be conducted on a non-working day and require a minimum of four hours, including switchover time from the primary data center to the disaster recovery site.

This shortens the current requirement of a full trading day. SEBI also wants MIIs to cover all market operation scenarios during the drill, simulate real-life load and participation, and test various disruption scenarios. To bolster resilience at the primary site, MIIs will conduct stress and mock testing, including transaction volumes, orders per second, masters, table sizes, and other non-transactional components.

Regular fault tolerance testing will be required for primary and disaster recovery systems to ensure automated redundancy in case of failures. MIIs must identify, document, and monitor boundary conditions, upper limits, and potential bottlenecks before they impact operations. SEBI also proposed adequate logging of application and component-level errors, along with a reference guide for interpreting errors to speed up troubleshooting.

For stock exchanges, a mechanism has been proposed to recover lost trade data from clearing corporations in case of disruptions. SEBI based these proposals on existing practices and aims to enhance operational resilience while streamlining compliance. Public comments on the proposals are invited until October 5.