SEBI proposes 4-hour DR drills for market infrastructure institutions
Synopsis
SEBI has proposed cutting the mandatory disaster recovery drill window for stock exchanges and other market infrastructure institutions from a full trading day to just four hours on a non-working day — a shift that reflects both industry feedback and a global move toward scenario-based, rather than duration-based, resilience testing.
Key Takeaways
SEBI on 15 September 2026 proposed reducing mandatory DR drill duration for MIIs from one full trading day to at least four hours .
Drills must be conducted on a non-working day , starting at the primary data centre and switching over to the disaster recovery site .
The change follows representations from exchanges that full-day drills are operationally cumbersome for both institutions and market participants.
Scenario lists for the switchover exercise must be reviewed by the Standing Committee on Technology (SCOT) of MIIs.
MIIs must proactively identify and monitor all system boundary conditions and upper limits to prevent operational exceptions.
The proposals are at the consultation stage; final guidelines are pending market participant feedback.
The Securities and Exchange Board of India (SEBI) on Tuesday, 15 September 2026, proposed shortening the duration of mandatory disaster recovery (DR) drills for market infrastructure institutions (MIIs) to a minimum of four hours, replacing the earlier requirement of a full trading day. The move is part of a broader push to strengthen operational resilience and data recovery norms for stock exchanges and other MIIs.
What the Proposed Framework Entails
Under the revised framework, MIIs would be required to conduct DR drills on a non-working day, beginning at the primary data centre (PDC) and switching over to the disaster recovery site (DRS). The entire drill — including switchover time — must run for at least four hours.
The earlier guidelines mandated drills spanning one full trading day and required a scenario of intraday shifting from the PDC to the DRS during mock trading sessions, to demonstrate readiness in meeting the stipulated Recovery Time Objective (RTO) and Recovery Point Objective (RPO).
Why SEBI Is Easing the Duration
SEBI said the proposed changes followed representations from exchanges, which flagged that conducting drills across an entire market session can be cumbersome for both market participants and the institutions themselves. By concentrating the exercise into a structured four-hour window, the regulator aims to reduce operational friction while preserving the integrity of preparedness testing.
Notably, this signals a shift in SEBI's regulatory philosophy — moving from time-based compliance to scenario-based validation, a model increasingly favoured by global financial regulators.
Scenario Testing and the Role of SCOT
As part of the DR switchover exercise, institutions will be required to test a range of scenarios that could impact their systems, depending on their specific architecture and line of business. A comprehensive list of such scenarios must be reviewed by the Standing Committee on Technology (SCOT) of MIIs, adding an institutional oversight layer to the preparedness process.
SEBI also directed MIIs to conduct comprehensive stress testing and mock testing across various system parameters — including master records, table sizes, and non-transactional components — to evaluate performance under scaled-up activity levels, increased load, or larger database records.
Boundary Conditions and Operational Safeguards
'MIIs shall proactively identify, document and monitor all boundary conditions and upper limits (such as database, configuration, table size, counter limits etc.) to prevent exceptions in smooth operations before such limits are breached,' SEBI said in its statement.
This requirement to pre-empt system ceiling breaches — rather than react after the fact — reflects SEBI's intent to shift MIIs from reactive incident management to proactive resilience governance. With Indian equity markets handling record volumes in recent years, the stakes for infrastructure stability have never been higher.
What Comes Next
SEBI's proposals are at the consultation stage, and MIIs, exchanges, and market participants are expected to submit feedback before final guidelines are issued. Once formalised, the revised norms will govern how India's critical market infrastructure prepares for — and recovers from — technology disruptions during live operations.
Point of View
MII resilience is no longer a back-office concern — it is systemic risk management, and regulators globally have learned that the hard way.
NationPress
15 Sept 2026
Frequently Asked Questions
What has SEBI proposed for disaster recovery drills at stock exchanges?
SEBI has proposed that market infrastructure institutions (MIIs), including stock exchanges, conduct DR drills of at least four hours on a non-working day, replacing the earlier requirement of drills spanning one full trading session. The drill must include a switchover from the primary data centre to the disaster recovery site.
Why is SEBI shortening the duration of DR drills?
SEBI said the change was proposed following representations from exchanges that conducting drills for the entire market session is operationally cumbersome for both MIIs and market participants. The regulator aims to preserve preparedness testing while reducing execution friction.
What is the role of the Standing Committee on Technology (SCOT) in the new framework?
Under the proposed framework, the comprehensive list of scenarios to be tested during the DR switchover exercise must be reviewed by the Standing Committee on Technology (SCOT) of the respective MII. This adds an institutional oversight layer to the scenario selection process.
What are the stress testing requirements SEBI has directed MIIs to follow?
SEBI has directed MIIs to conduct comprehensive stress testing and mock testing across system parameters such as master records, table sizes, and non-transactional components, to assess performance at scaled-up activity levels. Institutions must also proactively identify and monitor all boundary conditions and upper limits to prevent operational exceptions before those limits are breached.
What happens next after SEBI's proposals?
SEBI's proposals are currently at the consultation stage. MIIs, stock exchanges, and market participants are expected to submit feedback before final guidelines are notified. Once formalised, the revised norms will govern technology resilience and disaster preparedness requirements across India's market infrastructure.
