The Securities and Exchange Board of India (Sebi) fined Indian Clearing Corporation (ICCL), a fully owned subsidiary of the BSE, with a Rs 5.05 crore fine on Tuesday for allegedly violating regulations relating to cyber security and system audits. 

Following an inspection between December 2022 and July 2023, the market regulator issued the show-cause notice in October 2024.

Sebi concluded that ICCL forwarded the network auditor report to the regulator without seeking input from management or the board.  

The guidelines stipulate that the governing board of the market infrastructure institutions must be presented with the audit report and management’s comments. Within a month of the audit’s completion, Sebi must receive the board’s comments and the same document.

Additionally, it was discovered that ICCL had an outdated inventory that did not fit the requirements. The verdict pointed out that the findings of the report were not immediately addressed, despite the fact that ICCL conducted yearly cyber audits.  

The market regulator claims that the clearing company failed to meet regulatory standards by having a one-to-one connection between the Primary Data Center (PDC) and the disaster recovery site (DRS) or near site (NS).

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