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Sebi to step up cyber security in markets

Expands ambit of its technical advisory committee

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UK Sinha
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The Securities and Exchange Board of India (Sebi), which is mandated to regulate the entire gamut of capital markets in the country, has expanded the ambit of its Technical Advisory Committee (TAC) to include cyber security of the markets.

The committee advises Sebi on various policy and internal technological safety issues. It also aids the regulator on framing appropriate policies arising out of technological advancements in areas such as wireless trading, co-location, algorithmic trading, smart order routing, Application Programming Interface (API).

The securities market regulator on Wednesday expressed concerns over cyber-crimes which are getting increasingly complicated.

At a BSE conference on Wednesday, Sebi chairman UK Sinha said, "These (cyber) attacks are getting more sophisticated and the vulnerability of securities markets is increasing. Across the world, securities markets are very vulnerable to such attacks."

He said the adoption of technology by these attackers seems to suggest the involvement of states, in some cases.

"We are worried over state-sponsored cyber attacks. There are worries that the vulnerability in markets are increasing. We need to create a framework for future plan of action on securities market resilience." Sinha said.

He said that such crimes are done by people who have the best of technology and resources, and some of them are state-sponsored. It has a huge impact on larger systems, society and nations. These attacks are not just restricted to the financial services sector but are spread across all sectors of the economy, he said.

The five-member TAC formed in 2010 is headed by Ashok Jhunjhunwala, faculty-member, Indian Institute of Technology-Madras.

The other members are H Krishnamurthy of the Indian Institute of Science (Bangalore), Abhay Karandikar of IIT-Bombay and Vibhakar Bhushan of Trignon Business Consulting and Synchosoft.com.

A senior official at the conference said, "The move is aimed at securing the data, applications, database, operating systems and network layers of (FMIs) from various forms of cyber attacks such as Denial of Service (DoS) attacks, phishing, hacking, man-in-the-middle attack, sniffing, spoofing, key-logging and malware attacks."

Pointing to the cyber attacks on Sony Pictures and the White House, the officials emphasised on investment in improving the country's ability to protect its infrastructure, detect intrusions in real time and always stay one step ahead of the perpetrators.

Among the 44 economies of the world, India and South Korea are most vulnerable, encountering the highest rate of attacks per machine, a participant at the conference said.

More than 700 government websites that are hosted under 'gov.in' and 'nic.in' domains, have been hacked by cyber criminals since 2012. According to a report cited by the Maharashtra governor Vidyasagar Rao, who also was present at the conference, the number of cyber crimes in India may almost double to 3 lakh in 2015 over last year.

"We need ecosystems to protect the economic sovereignty of the nation. We also need to evolve a fool-proof cyber security mechanism to protect the economic integrity of our corporates, MNCs, and business organisations," said Vidyasagar Rao.

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