Market regulator awaiting ISF view on draft framework, says Whole-Time Member Varshney
SEBI, the capital markets regulator, is in the process of articulating a Cybersecurity and Resilience Framework, which it plans to implement pending feedback from industry stakeholders. Kamlesh Varshney, a Whole-Time Member of SEBI, announced this initiative on Saturday during the 13th International Convention 2024 organised by ANMI in the capital city.
Varshney disclosed that SEBI has already prepared a cybersecurity framework and has submitted it to the Industry Standards Forum for Brokers for their input. He emphasised the importance of brokers adopting this framework once it’s officially introduced, highlighting its role in safeguarding against cyber threats.
“Those who understand new technology and incorporate it in their business will survive. Others may fall on the wayside”, he said.
While Varshney couldn’t provide a specific timeline for the rollout, he said that compliance with the framework would be mandatory for all market intermediaries and participants.
This move by SEBI comes amidst growing concerns over cybersecurity in equity markets, particularly following recent reports of a ransomware attack on a leading brokerage firm, Motilal Oswal Financial Services.
“There is manipulation going on. We all know it. Whenever there is manipulation, SEBI intervenes. But SEBI cannot intervene on each and every manipulation. That has to be managed by intermediaries like yourself”, he said.
“You have to keep an eye. If you notice manipulation, try to stop it yourself. Be our eyes and ears and bring it to notice of SEBI”.
Varshney also urged brokers to stay abreast of global technological advancements and explore ways to integrate these innovations into their businesses, emphasizing the survival benefits of technological adaptation.
In addressing potential manipulative practices within the broking community, Varshney cautioned against such activities and urged brokers to remain vigilant, noting that while SEBI intervenes in cases of manipulation, proactive monitoring by intermediaries is crucial.
Furthermore, Varshney emphasized the importance of investor trust in sustaining the growth of the capital market ecosystem, highlighting the significant increase in resource mobilization through equity markets in recent years.
As of December 2023, the total number of demat accounts in the country had reached 140 million, marking a doubling in the past 2.5 years. The number of unique demat accounts had also doubled in the last four years, reaching 95 million by the end of 2023.
Varshney concluded by expressing optimism about India’s progress towards becoming a developed nation by 2047, emphasising the critical role of investor trust in this journey.