Sebi asks exchanges to frame new outsourcing policy

Sebi directed market infrastructure institutions to not outsource core and critical operations

The Securities and Exchange Board of India (Sebi) has asked stock exchanges and clearing corporations to prepare a framework for appointing of third-party vendors. The market regulator has directed the so-called market infrastructure institutions to not outsource core and critical operations such as trading information, infrastructure and surveillance.

Industry players say the move will help in better risk management and safeguard the markets and investors from unforeseen risks.

There have been instances in the past where the promoter of an exchange has also acted as a service provider, potentially creating a conflict of interest situation.

Although the regulator has allowed the exchanges and clearing