With online digitalization of the day-to-day operations in the Indian Stock Exchanges, their operational risks have been increased multifold. To mitigate these risks, in the recent past, Securities and Exchange Board of

Various key risk management measures initiated by SEBI, to mitigate operational risks of Stock Exchanges operations are as under: (i) Categorization of securities into groups 1, 2 and 3 for imposition of margins based on their liquidity and volatility. (ii) VaR (value at risk) based margining system. (iii) Specification of mark to Market margins. (iv) Specification of Intra-day trading limits and Gross Exposure Limits. (v) Real time monitoring of the Intra-day trading limits and Gross Exposure Limits by the Stock Exchanges. (vi) Specification of time limits of payment of margins. (vii) Collection of margins on upfront basis. (viii) Index based market wide circuit breakers. (ix) Automatic de-activation of trading terminals in case of breach of exposure limits. (x) VaR based margining system has been put in place based on the categorization of stocks based on the liquidity of stocks depending on its impact cost and volatility. It addresses 99% of the risks in the market. (xi) Additional margins have also been specified to address the balance 1% cases. (xii) Collection of margins from institutional clients on T+1 basis.