Sebi Urges Market Utilities For Continuous Monitoring, Vigilance & Preparedness Against Cyberattacks

"Cyberattacks are no longer isolated incidents —they rank among the top five global risks by likelihood over the next decade. The financial markets, with their high-value transactions and interconnected systems must, therefore, be fortified with even greater vigilance and preparedness," Pandey said.

"Exchanges, clearing corporations, depositories are not just “market utilities” —they are infrastructure of national importance. Their smooth functioning ensures capital formation, investor confidence, and economic resilience," Pandey said at National Institute of Securities Markets during a cybersecurity training programme.

"They operate in a dynamic technological environment where the threat landscape evolves daily. In this fast-evolving landscape, staying ahead of the curve is not a choice, it’s a survival imperative.The Bank for International Settlements warns that reactive measures, while necessary after an event, “cannot by themselves preserve stability if defences are weak,” Pandey said.

"A cyber incident at a financial institution can threaten the stability of the entire ecosystem. A disruption in one exchange’s order management system, or at a clearing corporation, could spread uncertainty and panic far beyond that single entity. That’s the nature of systemic risk —it doesn’t stay contained," Sebi chief said.

"Not all cyber incidents make headlines for massive financial losses —sometimes their impact lies in the blow to trust. In financial markets, perception can be as damaging as reality," he said citing some incidents from US market.

As per IMF report, almost one-fifth of the reported cyber incidents in the past two decades have affected the financial sector. The number of cyberattacks has almost doubled since the COVID-19 pandemic.

As per CERT-In annual report 2024, there were more than 20 lakh security incidents in year 2024.

"A small glitch in a trading algorithm can trigger market disruptions in milliseconds.A misconfigured server can open doors to malicious actors.A compromised account can lead to data leaks with severe reputational and financial damage. Sometimes, the biggest market shocks may not come from a hacker’s keyboard but from within our own systems. Internal errors, overlooked processes, or rushed deployments can be just as destructive as an external attack," Sebi chief said.

"Continuous monitoring, incident response rehearsals, and building forensic readiness before incidents happen, are essential. Proactive measures reduce both the probability and the impact of incidents. Reactive measures merely limit damage after trust has already been dented," Sebi chief said.