Securities and Exchange Board of India (SEBI)‘s revision of the framework governing technical glitches in stock brokersโ electronic trading systems of 2022 marks a significant step towards risk-based and proportionate regulation. The revised framework introduced vide Circular dated January 09, 2026 reflects a balance investor protection with operational practicality for market intermediaries.
Some of the key changes introduced in 2026, and why they are meaningful, are outlined below:
1.ย ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ๐ข๐ฌ๐๐ ๐๐ฉ๐ฉ๐ฅ๐ข๐๐๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐๐๐ฌ๐๐ ๐จ๐ง ๐๐ฅ๐ข๐๐ง๐ญ ๐ฌ๐ข๐ณ๐ The framework now applies only to stock brokers with more than 10,000 registered clients, excluding closed accounts. Now, smaller brokers with limited systemic impact are no longer subject to disproportionate compliance obligations, allowing regulatory focus to remain on entities posing higher market risk.
2.ย ๐๐ฅ๐๐๐ซ ๐๐ฑ๐๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง๐ฌ ๐๐ซ๐จ๐ฆ ๐ญ๐ก๐ ๐๐๐๐ข๐ง๐ข๐ญ๐ข๐จ๐ง ๐จ๐ โ๐ญ๐๐๐ก๐ง๐ข๐๐๐ฅ ๐ ๐ฅ๐ข๐ญ๐๐กโ The revised framework explicitly excludes issues such as cloud service provider outages, exchange-side disruptions, back-office systems not impacting trading, payment gateway failures, and decision-support tools. Under the earlier framework, no such exclusions existed, resulting in mandatory reporting of all technical issues irrespective of their materiality or trading impact. The revised definition therefore introduces much-needed clarity and proportionality, ensuring that reporting obligations are aligned with issues that have a meaningful impact on trading operations.
3.ย ๐๐ญ๐ซ๐๐๐ฆ๐ฅ๐ข๐ง๐๐ ๐๐ง๐ ๐ซ๐๐๐ฅ๐ข๐ฌ๐ญ๐ข๐ ๐ซ๐๐ฉ๐จ๐ซ๐ญ๐ข๐ง๐ ๐ซ๐๐ช๐ฎ๐ข๐ซ๐๐ฆ๐๐ง๐ญ๐ฌ The reporting timeline for technical glitches has been extended from one hour to two hours, trading holidays are factored into reporting deadlines, and submissions are consolidated onto a common reporting platform. This enables brokers to prioritise issue resolution over procedural compliance.
4.ย ๐๐ซ๐จ๐ฉ๐จ๐ซ๐ญ๐ข๐จ๐ง๐๐ญ๐ ๐๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ข๐ฌ๐ข๐ง๐๐๐ง๐ญ๐ข๐ฏ๐ ๐ฌ๐ญ๐ซ๐ฎ๐๐ญ๐ฎ๐ซ๐ Technology requirements relating to capacity planning, software testing, disaster recovery, and financial disincentives have been rationalised based on broker size, technology dependence, and the severity and frequency of glitches. The framework incentivises genuine system resilience rather than compliance-driven infrastructure spending.
๐๐จ๐ง๐๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง : By focusing on material risks, accountability, and operational feasibility, the 2026 framework strengthens the credibility and effectiveness of technology governance in the Indian securities markets.