SEBI Proposes 2X Peak Load Capacity For Commodity Exchanges

The Securities and Exchange Board of India (SEBI) has directed exchanges and clearing corporations operating in the commodity derivatives segment to maintain installed capacity of at least twice their projected peak load for critical IT systems.

Real-Time Monitoring

The new infrastructure planning and real-time performance monitoring framework, issued through a circular on Wednesday, will come into effect three months from the date of issuance.

The regulator said the move aims to strengthen system resilience and ensure consistent response times during high-volume trading. It also aims to improve the oversight of technology infrastructure in the commodity derivatives market.

Shift From Earlier Norms

Note that under guidelines issued in 2016, commodity exchanges were required to maintain trading system capacity of at least four times the peak load. The new circular proposes a minimum installed capacity of 2x the projected peak load. The requirement applies to exchanges as well as clearing corporations in the commodity derivatives segment.

The directive comes at a time when trading volumes in commodity derivatives have seen sharp swings. This is due to global price volatility in metals, energy, and agricultural products. High intraday spikes can strain exchange systems, especially during major global events or domestic policy announcements.

Mandatory Corrective Action At 75% Utilisation

The regulator has also set a trigger for system utilisation. If the actual capacity utilisation of any component crosses 75% of installed capacity, the exchange or clearing corporation must take immediate corrective action. This may include capacity enhancement or system fine-tuning.

SEBI said institutions must clearly define how such situations will be handled in their capacity planning and real-time performance monitoring policy.

Oversight of the framework will rest with the Standing Committee on Technology (SCOT). Exchanges and clearing corporations will need SCOT approval before finalising their revised policies.

Broader Regulatory Push On Technology

SEBI has, in recent years, tightened technology and risk management standards across market infrastructure institutions. The regulator has issued multiple circulars covering cybersecurity, disaster recovery, business continuity planning, and system audits.

The commodity derivatives segment has gradually been aligned with equity market infrastructure standards. The new circular further formalises capacity planning and monitoring in this segment. By linking corrective action to a defined utilisation threshold and placing oversight under SCOT, the regulator has added an additional governance layer.

Also Read - SEBI Proposes Auto-Withdrawal Mechanism For Demat MF Units

What It Means For Exchanges And Traders?

The new norms push exchanges and clearing corporations to keep surplus capacity and act early when systems near stress levels. This may require higher technology spending and tighter monitoring. For traders, stronger system capacity and faster response times can bring down the risk of trading disruptions during volatile sessions.

More stable infrastructure can also improve confidence in the commodity derivatives market, especially when volumes surge sharply.

Sources:

Economic Times

The Hindu Business Line