According to the regulator’s annual report for 2019-20, markets regulator SEBI is considering a proposal to introduce a framework to ascertain the incidents of technical glitches.
The aim is to ensure compensation that needs to be paid to the investors and to devise a methodology for calculation of compensation.
Further, a well-documented framework at the depository level for orderly winding down of the depositories operations is being developed in accordance with guidelines specified by SEBI.
The regulator would also review the quantum of Settlement Guarantee Fund (SGF) of the Clearing Corporations based on the stress test.
This is to increase the resilience of the markets to possible risks posed by extreme volatility.
SEBI is also considering a proposal to ascertain the optimum corpus for the Investor Protection Fund (IPF) of the stock exchanges on the basis of rigorous stress testing.
This will ensure that the legitimate claims of the clients of the defaulting members or brokers even in extreme times are met.
SEBI further added that it is pertinent to give more focus on system or technology during the inspection of market infrastructure institutions (MIIs).
This is due to the fact that MIIs rely heavily on technology for their various activities related to trading, clearing and settlement etc.
Besides this, it is proposed to build an inspection manual that can be used as a single source of reference for conducting the inspections of MIIs.
The purpose is to build processes that can be automated and assist in a thorough inspection of the MIIs.
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