Indian Clearing Corporation Ltd. (ICCL) was fined Rs 5.05 crore by markets regulator Sebi on Tuesday for failing to comply with the disaster recovery and cyber security framework. The Securities and Exchange Board of India (Sebi) ruling has instructed it to pay the penalty within 45 days.
In 2007, ICCL was established as a fully-owned subsidiary of BSE Ltd.
For different BSE segments, it performs clearing, settlement, collateral management, and risk management tasks.
To determine if Indian Clearing Corporation Ltd. has complied with Sebi regulations, the Securities and Exchange Board of India (Sebi) examined the company’s books of accounts and other documents for the period of December 1, 2022, to July 31, 2023.
The agency discovered non-compliance with important regulatory rules throughout its investigation, especially in the areas of cybersecurity and disaster recovery.
The regulator discovered that the cybersecurity and cyber resilience frameworks, as well as the standards for system and network audits, were not being followed.
Sebi discovered that ICCL had not kept an inventory of its IT assets, including software assets and criticality classification, up to date.
Furthermore, even though ICCL completed the audit as required, they failed to close cyber audit observations in a timely way.
Furthermore, ICCL violated disaster recovery regulations by failing to completely synchronize its backup systems with its primary systems.
This further suggested improper maintenance of ICCL’s IT asset inventory. Without input from the board or management, ICCL sent the network audit report to Sebi.
On August 4, 2023, the clearing organization sent its network audit report to Sebi without requesting feedback from the board. On August 10, 2023, ICCL presented the report to the board, and on August 14, 2023, the board accepted it without making any remarks.
Sebi decided that ICCL should have noted and reported this even if no remarks were required. ICCL was therefore deemed to be non-compliant.
The Securities Contracts (Regulation) Act (SCRA) and the SEBI Act were used by the regulator to impose fines on ICCL after finding the company guilty of three of the four charges.
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