SEBI Fines ICCL Rs 5.05 Crore for Cyber Security Violations
Click to start listening
Synopsis
SEBI has fined ICCL Rs 5.05 crore for cyber security compliance failures. The fine stems from multiple violations identified during an inspection, including inadequate audits and failure to maintain IT asset inventories.
Key Takeaways
- SEBI imposed a Rs 5.05 crore fine on ICCL.
- The penalty is due to cyber security violations.
- ICCL failed to submit a compliant audit report.
- There were issues with the disaster recovery system.
- SEBI has given ICCL 45 days to pay the fine.
Mumbai, Feb 25 (NationPress) The Securities and Exchange Board of India (SEBI) has levied a fine of Rs 5.05 crore on the Indian Clearing Corporation (ICCL), a subsidiary of the Bombay Stock Exchange (BSE), due to non-compliance with cyber security and system audit regulations.
The SEBI carried out an inspection of the ICCL from December 2022 to July 2023 and subsequently issued a show-cause notice in October 2024.
Upon reviewing the results, the market regulator identified multiple infractions in the operations of the ICCL.
One significant issue was the ICCL's submission of its network audit report to the SEBI lacking any comments from its management or board.
According to regulations, the audit report must first be assessed by the governing board of market infrastructure institutions, and their remarks should be included before presenting it to the SEBI within one month of the audit's completion.
Additionally, the SEBI discovered that the ICCL did not keep an updated inventory of its IT assets, including software classifications.
Despite conducting cyber audits biannually, the problems highlighted in these audits were not addressed within the stipulated timeframe.
Another major infraction pertained to the ICCL's disaster recovery system.
SEBI guidelines stipulate a one-to-one correspondence between the primary data center (PDC) and the disaster recovery site (DRS), a requirement that the ICCL failed to fulfill.
G Ramar, SEBI’s Quasi-Judicial Authority, referenced the Dr Bimal Jalan Committee’s 2010 report on market infrastructure institutions while issuing this ruling.
The regulator has instructed the ICCL to remit the penalty within 45 days.
According to the committee report, "These institutions (stock exchanges, depositories, and clearing corporations) are systemically significant for the country’s economic development, serving as the essential infrastructure for the securities market. Collectively known as Market Infrastructure Institutions (MIIs), they represent ‘vital economic infrastructure’. The recent financial turmoil has underscored the importance of financial institutions for economic stability," the report stated.
