India makes software testing mandatory for commodity broking and trading systems

Following a merger of the Forward Markets Commission (FMC) with Securities and Exchange Board of India (Sebi) earlier this autumn, it has now become compulsory for commodity brokers and traders to test their trading systems as well as software tools, in consultation with the exchanges.

The new guidelines from Sebi have been designed to prevent possible manipulation, and are already in place for stock exchanges.

Any commodity brokers or members using malfunctioning software could face a penalty.

Software manipulation would affect the integrity of the markets

Since new software or changes to the existing software without proper testing may affect the integrity of the markets, the regulator said the guidelines are being made applicable to commodity markets also, Sebi said in a circular.

Sebi noted in a recent circular that since new software or changes to the current programming without testing may influence the integrity of the markets, the stock exchange guidelines are being made pertinent to commodity markets also.

The new guidelines would come into effect for commodity markets from 1 April 2016.


Edited from source by Cecilia Rehn.

Source: Times of India