Sebi introduces SaaS model for clearing corps to boost business continuity

To strengthen the business continuity framework of clearing corporations for handling major software malfunctions, Sebi on Wednesday asked them to establish their critical Risk Management Systems (RMS) using a software-as-a-service (SaaS) model.

RMS plays an important role in ensuring 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 an additional tool for business continuity in case of issues with RMS of clearing corporations, Sebi said in a circular.

"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," Sebi said.

The framework in the first phase would operate for existing interoperable segments of CCs -- cash market, equity derivatives segment, currency derivatives.

"Each clearing corporation 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," Sebi said.

The regulator said the clearing corporation would take a decision to shift operations to SaaS-RMS within 30 minutes of its inability to do an online real-time risk management of trades at its site of functioning.

Within 30 minutes of this, all allied activities such as sending violation messages to exchanges, intimating details of portal to interact with SaaS-RMS to the clearing members will be activated through SaaS-RMS.

Mock session of SaaS-RMS will be carried out at least once in a quarter to familiarise and train members.