SEBI Proposes Strengthened Business Continuity and Disaster Recovery Framework for Market Infrastructure Institutions
The Securities and Exchange Board of India (SEBI) has released a consultation paper outlining a series of proposed enhancements to the Business Continuity Plan (BCP) and Disaster Recovery (DR) framework applicable to Market Infrastructure Institutions (MIIs). The proposals, published on September 15, 2026, aim to make DR drills more efficient, bolster operational resilience at primary sites, and introduce a structured data recovery mechanism specifically for Stock Exchanges.
Background and Regulatory Context
Evolution of BCP and DR Guidelines
SEBI's regulatory framework governing BCP and DR for MIIs has undergone progressive development since its initial formulation. Guidelines were first introduced in April 2012, followed by significant revisions in March 2019 and again in March 2021. These iterative updates reflected the regulator's commitment to keeping pace with technological advances and evolving operational risks within the securities market ecosystem.
Over time, practical experience gathered from DR drill exercises, system testing procedures, and data recovery operations across MIIs has highlighted areas requiring further refinement. Drawing on these accumulated learnings, SEBI has formulated the present set of proposals with a dual purpose: to reduce the compliance burden on MIIs while simultaneously raising the standard of operational preparedness.
Regulatory Objectives
The consultation paper identifies two overarching goals:
- Enhancing the ease with which MIIs can conduct DR drills, thereby reducing operational disruption to market participants
- Increasing the overall operational resilience of MIIs, particularly at their primary data infrastructure
These objectives form the foundation upon which each of the three core proposal clusters has been developed.
Key Proposals
1. Streamlining Mock DR Drill Procedures
Existing Requirements
Under Para 9.1.3.3 and Para 9.1.3.8 of the Master Circular dated December 30, 2024 for Stock Exchanges and Clearing Corporations, MIIs are currently required to conduct DR drills spanning an entire trading day. This includes simulating an intraday shift of operations from the Primary Data Centre (PDC) to the Disaster Recovery Site (DRS) during mock trading sessions, in order to demonstrate their capability to meet the stipulated Recovery Time Objective (RTO) and Recovery Point Objective (RPO). Equivalent provisions exist under the Master Circular for Depositories and the Master Circular for the Commodity Derivatives Segment.