The Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹12 lakh on NSE Data And Analytics Ltd due to multiple regulatory infractions identified during an inspection. This fine highlights ongoing concerns about compliance within financial institutions and the importance of maintaining stringent operational standards in the market.
SEBI’s inspection, conducted on September 6-7, 2023, scrutinized NSE Data And Analytics’ operations as a KYC Registration Agency from April 2022 to July 2023. The regulator found significant irregularities, including:
- Lack of IT Infrastructure Segregation: SEBI noted that there was no segregation of IT infrastructures and manpower between NSE Data And Analytics and its parent organization, the National Stock Exchange (NSE).
- Delayed Acknowledgment Letters: The company failed to send acknowledgment letters to investors in 61 cases, exceeding the mandated 10-day limit.
- Cybersecurity Lapses: Irregularities in cybersecurity audits were noted, including unaddressed vulnerabilities and deficiencies in data center security practices.
NSE Data And Analytics asserted that it had taken corrective steps in response to SEBI’s findings, but the regulator emphasized that as a separate legal entity, the company bears full responsibility for its compliance.
Implications for the Future
This ruling serves as a reminder of the stringent standards expected from financial institutions in India, particularly regarding cybersecurity, KYC processing, and corporate governance. The imposed fine underscores the need for rigorous compliance measures to protect investor interests and maintain market integrity.
