SEBI stresses on cyber security besides compliance

Securities and Exchange Board of India (SEBI) stresses the importance of securing cyber security besides focussing on compliance, according to its chairperson Tuhin Kanta Pandey.

Citing the introduction of framework to facilitate safer participation of retail investors in algorithmic trading, Mr. Pandey, while speaking at Morningstar Investment Conference, said: “Cyber security remains a fore most concern for all market participants. Firms must safeguard sensitive client data and critical infrastructure from sophisticated threats. Third party and outsourcing risks have grown with greater Reliance on technology vendors and service providers, requiring stronger oversight and due diligence. The rise of algorithmic and high frequency trading brings efficiency, but also demands robust risk controls, real-time monitoring and compliance safeguards.”

What is algorithmic trading?

Algorithmic trading involves using complex algorithms and automating trades. This tech-enabled trading method is largely used by professional traders, large hedge funds and foreign investment and is starting to become common among retail traders.

Investor protection

Further he spoke about investor protection and measures to enable the same.

“Investor protection and market integrity are often used as regulatory slogans, but they must translate into real world discourse. Investor protection simply means that the investor receives timely, accurate, understandable information. The investor’s assets are held securely segregated from others. The intermediary acts in the interest of the investor… avoiding unfair practices or conflicts. And when things go wrong, the investor has access to redress. And similarly, market integrity means transparent fair bodily transactions, no hidden cost, no preferential access, [and] no manipulation,” he added.