SEBI has issued a consultation paper proposing comprehensive rationalization and consolidation of regulations governing trading software, technology, and common IT-related provisions applicable to Stock Exchanges, Clearing Corporations, and Depositories (MIIs) as part of its Ease of Doing Business (EODB) initiative. The proposals aim to simplify compliance by merging overlapping provisions, deleting obsolete requirements, eliminating duplication, and adopting technology-neutral, principle-based standards. Key changes include strengthening cybersecurity norms through updated encryption, mandatory two-factor authentication, enhanced firewall practices, and improved protection of sensitive authentication data. The paper also proposes removing outdated Wireless Application Protocol (WAP) provisions, streamlining Internet-Based Trading (IBT) and Securities Trading using Wireless Technology (STWT) requirements, expanding Direct Market Access (DMA) eligibility to more client categories, simplifying audit and record-keeping requirements, mandating robust backup systems, and consolidating IT provisions into unified circulars for Market Infrastructure Institutions. The consultation seeks stakeholder feedback before finalizing the revised regulatory framework.
Securities and Exchange Board of India
CONSULTATION PAPER ON DRAFT CIRCULAR FOR TRADING SOFTWARE AND TECHNOLOGY AT STOCK EXCHANGES and DRAFT CONSOLIDATED CIRCULAR ON COMMON INFORMATION TECHNOLOGY (IT) RELATED PROVISIONS FOR MIIs – FOR PUBLIC COMMENTS
Measures for Ease of Doing Business (EODB) for Market Infrastructure Institutions (MIIs) – Modifications to Master Circular for Stock Exchanges and Clearing Corporations (“MSECC”), Master Circular for Commodity Derivatives (“MCCD”) on Trading Software and Technology and to Master Circular for Depositories on Information Technology related provisions
SEBI-Jun 22, 2026 | Reports : Reports for Public Comments
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1. OBJECTIVE AND BACKGROUND
1.1 The Hon’ble Finance Minister in the budget announcements for FY 2023-24, inter-alia, made an announcement to simplify, ease and reduce cost of compliance for participants in the financial sector through a consultative process.
1.2 In order to align the process of review of Master Circulars with the budget announcement, SEBI, inter-alia, prior to issuing a circular under the Acts or regulations, generally, undertakes public consultation.
1.3 Therefore, in compliance with the mandate and procedure envisaged in the aforesaid budget announcement, towards facilitating ease of doing business/compliance for stock exchanges, following Consultation Papers (CPs) have been issued:
1.3.1 CP on Measures for ease of doing business on Administration of Exchanges (with respect to Chapter 6 of MSECC and Chapter 13, 14, 15 of MCCD) has been put up for public comments on October 08, 2025. The link to access the aforesaid consultation paper is https://www.sebi.gov.in/reports-and-statistics/reports/oct- 2025/consultation-paper-on-measures-for-ease-of-doing-business-on-administration-of-exchanges 97131.html
1.3.2 CP on Measures for ease of doing business on Trading at Exchanges (with respect to Chapter 1 of MSECC and Chapters 1 and 3 of MCCD) has been put up for public comments on January 09, 2026. The link to access the aforesaid consultation paper is https://www.sebi.gov.in/reports-and-statistics/reports/jan-2026/consultation-paper-on-circular-for-trading-at-stock-exchanges-99010.html
1.3.3 CP on Measures for ease of doing business on Exchange Traded Derivatives (including Commodity Derivatives) has been put up for public comments on May 14, 2026. The link to access the aforesaid consultation paper is https://www.sebi.gov.in/reports-and- statistics/reports/may-2026/consultation-paper-on-measures-for-ease-of-doing-business-on-exchange-traded-derivatives-101425.html
1.4 It was proposed in the aforesaid Consultation Papers that the approach to review shall broadly entail the below activities:
1.4.1 Chapter-wise review of Master Circular for Stock Exchanges and Clearing Corporations dated December 30, 2024;
1.4.2 Entity-wise review of Master Circular, in terms of having a Master Circular for Exchanges and separate Master Circular for Clearing Corporations;
1.4.3 Merger of Master Circulars into a single set of directions for Stock Exchanges and Commodity Derivatives exchanges.
1.5 Accordingly, this Consultation Paper is fourth in the series of Consultation Papers to be issued in this regard. This Consultation Paper is prepared proposing changes in extant norms and devising:
1.5.1 a single consolidated circular on Chapter 2 (Trading Software and Technology) for Exchanges.
1.5.2 One consolidated circular for MIIs (Exchanges, Clearing Corporations and Depositories) w.r.t common IT related provisions on Annual System Audit, Business Continuity Plan and Disaster Recovery (BCPDR), Cyber Security and Cyber Resilience, Capacity Planning and Advisories related to Technology.
1.6 Accordingly, the objective of this consultation paper is to seek comments/views/suggestions from public on the modifications to:
1.6.1 Chapter 2 (Trading Software and Technology) of MSECC dated December 30, 2024, and
1.6.2 Chapter 16 (Trading Software and Technology) of MCCD dated August 04, 2023.
through, inter-alia, simplification of regulatory requirements, removal of redundant provisions, discontinuation of duplication, in order to promote ease of doing business (EODB) and reduce the compliance burden on exchanges.
Accordingly, this consultation paper is for combined guidelines for Stock Exchanges on the aforementioned Chapters and consolidated guidelines for MIIs on common IT related provisions and shall replace all the applicable provisions till February 28, 2026 in respect of Stock Exchanges (including Commodity Derivatives exchanges) and MIIs respectively.
2. SUMMARY OF CHANGES SUGGESTED
The current provisions, proposed changes and rationale for the changes are briefly mentioned as under:
