To strengthen the business continuity framework of clearing corporations (CC) for handling major software malfunctions, SEBI on 20th Dec 2023 issued to the circular to establish their critical Risk Management Systems (RMS) using a software-as-a-service (SaaS ) model.
RMS is classified as a critical system of CC and plays an important role in ensuring the smooth and uninterrupted functioning of the securities market by carrying out online real-time risk management of trades happening on stock exchanges.
Non-availability of RMS poses a major risk to the continuity of trading on stock exchanges.
In the first phase, systems would be designed to provide additional tool for business continuity in case of issues with Risk Management Systems (RMS) of CCs.
In order to further manage disruptions impacting availability of RMS, it is proposed to have another contingency measure in place under Software as a Service (SaaS) model.
The framework in the first phase would operate for existing interoperable segments of CCs (Cash Market, Equity Derivatives Segment, Currency Derivatives)
Each CC shall design a system to run its RMS related operations, to risk manage trades for its clearing members, using the RMS related software components of another CC. This instance would be called SaaS-RMS.
A CC to take decision to shift operations to SaaS-RMS within 30 minutes of occurrence of its inability to do online real time risk management of trades at its site of functioning.
Within 30 minutes of the above, all allied activities such as sending violation messages to exchanges, intimating details of portal to interact with SaaS-RMS to the Clearing Members etc. to be activated through SaaS-RMS.
Mock session of SaaS-RMS to be carried out at least once in a quarter to familiarize and train members.
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