Sebi asks depositories to set up IT strategy panels

Market regulator Sebi today asked depositories to formulate information technology strategy panels at board level with a view to strengthening the IT governance framework of their systems.
Sebi issued guidelines to strengthen the IT governance framework of depositories following recommendations of a committee, which was formed by the regulator in December 2012 to review the country's depository system.
Depositories have the mandate to help firms convert their physical shares or securities into dematerialised or demat form and thereafter maintain those shares, and also supervise proper conversion and reconciliation of their total share capital by the companies.
Depositories will now have to formulate an IT strategy committee at board level to provide insight and advice in various areas that include developments in IT from a business perspective and competitive aspects of IT investments, the Securities and Exchange Board of India (Sebi) said in a circular.

Also, alignment of IT with business direction, availability of IT resources to meet strategic objectives and alignment of the IT architecture to the organisation needs are among other areas.
The regulator said that depositories will have to formulate an executive level IT steering committee to assist the IT strategy committee in implementation of the framework.

The IT steering committee should comprise of representatives from IT, Human Resources (HR) and legal among others.
The depositories will have to formulate an IT strategy document and an 'information security policy' which should be approved by the Board and reviewed annually.
They also need to create an office of information security and designate an official as Chief Information Security Officer whose work would be to assess, identify and reduce IT risks, establish appropriate standards and controls and direct the establishment and implementation of policies and procedures.