Testing of software used in or related to Trading and Risk Management
Summary
SEBI has made mandatory mock trading sessions optional for stock exchanges that provide a suitable simulated test environment. Stock exchanges must ensure the test environment is available to all members with specific data and timing requirements. Trading members with approved algorithms are required to participate in these simulations monthly, with results subject to audit and reporting.
Text
requirement of mandatory mock trading sessions... shall be optional if a Stock Exchange provides suitable simulated test environment... and ensures the following:
The test environment shall be made available to all the members.
The test environment shall be made available for at least two hours after market hours and at least on two trading days in a week.
For the purpose of testing, Stock Exchange shall make available data from at least one trading day in all segments and the same shall not be older than one month from the day of the testing environment.
All trading members (excluding those who use only Exchange provided front end and/or ASP services) having approved Algorithms... shall participate in the Simulated Environment at least on one trading day during each calendar month...
Exchange shall provide a daily log... to all participating members. The Exchange shall provide summary report of such activity to SEBI in the monthly development report (MDR). This shall be audited and reported in the System Auditors report.
Other conditions prescribed in SEBI Circulars dated August 19, 2013 and February 07, 2014 shall remain unchanged.
take necessary steps and put in place necessary systems for implementation of the above.
make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.
bring the provisions of this circular to the notice of the stock brokers/ trading members of the stock exchanges and also disseminate the same on its websites.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992...
Source: SecMarx — Testing of software used in or related to Trading and Risk Management. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.