While insider trading can harm the integrity of securities market, cyberattacks can wipe out billions in minutes, making it more imperative for investors to exercise vigilance and exhibit preparedness.
Speaking at an event at the National Institute of Securities Markets (NISM) on Thursday, the chairman of the Securities and Exchange Board of India (SEBI), Tuhin Kanta Pandey, stressed on the importance of protecting critical infrastructure such as exchanges, clearing corporations and depositories, and called them “infrastructure of national importance”.
When it comes to enhancing cyber resilience, said Pandey, capacity-building programmes shouldn’t be undermined, nor considered as a one-off event or a box to be ticked.
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“It is a continuous process of learning, upgrading, and adapting, as the threat landscape never stands still,” the chief said at the Cybersecurity Training Programme for SEBI-regulated entities, adding that the markets’ smooth functioning supports capital formation, investor confidence, and economic resilience.
Referring to the infamous Knight Capital incident that took place in the US in 2012, Pandey reminded the audience of an obsolete code in a new software roll-out that had caused faulty trades worth billions, leading to losses of USD 440 million within 45 minutes, along with a complete collapse of the company.
With cyberattacks no longer being isolated incidents, Pandey said small glitches can have huge consequences, leading to market disruptions in milliseconds. Similarly, a misconfigured server or compromised account can lead to massive financial losses and damage to a company’s reputation.
“Cyberattacks rank among the top-five global risks by likelihood over the next decade. Given the high-value transactions and interconnected systems of financial markets, greater vigilance and preparedness are essential,” he noted.
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Staying ahead of the threat landscape, therefore, is a “survival imperative”, Pandey underscored, saying prevention in these cases costs far less than cure.
Besides technological backing, human defense is equally significant since many security breaches occur due to human errors, phishing attacks, or even unintended disclosure of critical information, the SEBI chief said.
"That's why your role is as much about preserving trust as it is about preventing theft," Pandey told IT professionals, urging them to participate in continuous training, monitoring, and preparedness activities to ensure market security.
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