Technical Glitch at New York Stock Exchange (NYSE) alerts SEBI

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Due to the technical glitch in NYSE recently, there initiated an urgent review about the risk management and disaster recovery systems of Indian markets. Capital market regulator SEBI reviewed the trading systems of stock markets after the NYSE suffered a near four-hour trading halt on the day it happened. SEBI took stock of the situation with the BSE, MSEI and NSE and found it to be satisfactory. According to the top officials, the systems were upgraded to tackle the unforeseen circumstances. There was nothing wrong. They made this statement after making a detailed review. The initial investigation found that the technical glitch was due to the internal software up gradation. There were several cyber attacks which affects the stock exchange.

While there have been several cases of such technical glitches hitting the stock exchanges abroad, the Indian markets have been relatively better off on this front. SEBI need to have a robust cyber security framework to provide essential facilities and perform systemically critical functions of trading, clearing and settlement in securities market. The regulator will conduct regular audit of the software systems to avoid glitches.

SEBI issued certain new guidelines to safeguard systems from cyber attacks. According to Ashishkumar Chauhan MD & CEO, BSE, “Today, hackers use complicated tools, some attacks are robotic. But most attacks we are able to ward off. But this is a race against time. The hackers only have to succeed once in one area, and it is important to monitor the whole building, the perimeter of our systems”.

SEBI gives instruction to implement the changes within 6 months and the Market Infrastructure Institutions must have robust cyber security and to assess the robustness of systems and also to avoid software related disruptions. Electronic trading system at NSE is very strong and scalable. It is continuously upgraded to accommodate various risk management features etc. The problems in NSYE are mainly due to the cyber attacks. There is also speculation about more cyber attacks in future. NSYE issued more than 60 alerts till the time of trading.

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