SEBI (Securities and Exchange Board of India) on 22 January 2014 constituted the Depository System Review Committee (DSRC) to undertake a comprehensive review of the Indian depository system. Based on the recommendations of DSRC, following guidelines are issued to strengthen the Information Technology (IT) governance framework of depositories.
Depositories shall formulate an IT strategy committee at the Board level of depository to provide insight and advice to the Board in various areas that may include
a. Developments in IT from a business perspective.
b. The alignment of IT with the business direction.
c. The availability of IT resources to meet strategic objectives.
d. Competitive aspects of IT Investments.
e. Alignment of the IT architecture to the organization needs and its approval.
f. Setting priorities and milestones.
The circulation says that the Depositories shall formulate an IT strategy document and an Information Security policy which should be approved by the Board and reviewed annually.
The guidelines were issued by SEBI following the recommendation of a committee to strengthen the IT governance framework of depositories formed by the regulator in December 2012 to review the depository system in India. The depositories have the mandate to help firms in converting their physical shares or securities into dematerialized or demat form. They also have been asked to maintain the shares and supervise proper conversation and reconciliation of their total share capital by the companies.
A circular of SEBI has asked the depositories to formulate an IT strategy committee at board level. This has been done to provide an insight and advice in various areas, which include developments in IT from a business and competitive aspects of IT investments.
This circular has been issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 which reads with Sections 19 of the Depositories Act, 1996 to protect the interest of investors in securities and to promote the development of, and to regulate the Securities market.