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Informist, Tuesday, Mar. 11, 2025

--HDFC Sec settles SEBI probe in its technology systems for INR 6.5 million

--HDFC Sec breached norms on robust IT, cybersecurity requirement, says SEBI

NEW DELHI – HDFC Securities Ltd., the equity broking subsidiary of HDFC Bank Ltd., has paid INR 6.5 million to settle a probe by the Securities and Exchange Board of India for alleged breach of norms requiring broking firms to have robust systems, particularly related to technology operations and cyber-security measures.

In a settlement order issued Tuesday, SEBI said it had issued a show-cause notice to HDFC Securities on Aug. 8, alleging violations of provisions in SEBI's circulars pertaining to critical IT assets' capacity utilisation alerts, disaster recovery drills, cyber-security resilience policies, and policy for identifying critical assets. Following the show-cause notice, HDFC Securities approached SEBI and proposed settling the case under the market regulator's settlement proceedings regulations.

According to SEBI's show-cause notice, the brokerage had set alerts for current capacity utilisation of critical assets at 75-80%, breaching the requirement of alerts to be generated when the capacity utilisation goes beyond 70%. HDFC Securities had also not implemented application programming interface-based logging and monitoring mechanism for 47 out of 52 servers during the inspection period, the show-cause notice had alleged.

Further, the brokerage had not conducted the mandated disaster recovery drill for one full trading day per quarter during the inspection period, according to SEBI's notice. HDFC Securities had also failed to define the frequency for periodic cyber and information security awareness training and identification of vendors for critical systems in its cyber-security policy, the show-cause notice had alleged. The brokerage had also failed to categorise all critical applications and their servers such as the internet-facing website, www.hdfcsec.com, the market regulator had said in the show-cause notice.  End

Reported by Rajesh Gajra

Edited by Rajeev Pai

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