SEBI Launches IT Resilience Index for Capital Markets

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Key takeaways

SEBI launched the IT Resilience Index (ITRI) as a quantitative tech health scorecard for Market Infrastructure Institutions (MIIs).
The index features a 9-parameter architecture giving 20% weight each to Availability and Cybersecurity, and 10% each to Business Continuity and Reliability.
It requires MIIs to adopt an automated Early Warning System (EWS) to detect hardware stress and latency spikes before operational outages occur.
This framework protects India's fast-paced T+1 and T+0 trade settlement environments from potential systemic financial disruptions.

The Securities and Exchange Board of India (SEBI) introduced the IT Resilience Index (ITRI) as a digital health scorecard for Market Infrastructure Institutions (MIIs).
This new tool measures systemic digital safety in capital markets, much like capital adequacy ratios measure financial health in banks.
As the market regulator, SEBI oversees this framework to track the technical strength and disaster recovery setup of key institutions.
The main aim is ensuring that trading, clearing, and settlement platforms quickly recover from cyberattacks, system glitches, and sudden trading spikes without disturbing financial stability.

The index replaces static periodic audits with an objective numerical score that tracks live system readiness and backup switching capabilities.
It uses a 9-parameter architecture that assigns weights based on risk, giving 20% weight to Availability, 20% to Cybersecurity, 10% to Business Continuity, 10% to Reliability, and 5% to Scalability.
Institutions must set up an automated Early Warning System (EWS) that spots system slowdowns and hardware strain before actual outages happen.
This approach accepts that tech shocks can happen, focusing on how quickly systems absorb the impact and restore normal operations.
It links with future tech strategies, incorporating tools like artificial intelligence (AI/ML), SupTech/RegTech, and quantum-safe cryptography.

This framework creates an enforceable metric for IT risk, which could serve as an international benchmark for financial regulators.
It prevents technical glitches at stock exchanges and depositories from disrupting market operations, which is vital for India's fast T+1 and T+0 settlement systems.