Friday, December 9, 2022

Sebi is asking depositors to use ledger technology delivered to monitor security construction

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Market regulator Sebi on Wednesday called on savings banks to use ledger or blockchain technology deployed to record and monitor security constructions and consistent security agreements.

Distributed ledger technology has the potential to provide a more robust system than traditional traditional data. It provides better protection against various types of cyber attacks due to its widespread nature, which eliminates a single point of attack, Serb’s statement said.
The regulator said the establishment of a ‘security monitoring and agreement’ platform for deposits held.

The move is aimed at strengthening the security-building process and monitoring security measures, asset security and consistent securities agreements.

The system used by led ledger technology (DLT) will be used to record the construction process and security monitoring (due diligence, remuneration etc.), continuous monitoring of contracts by trade trustees and credit rating of fixed equity credit rating agencies (CRAs).
“A system that uses blockchain technology in fixed securities and underlying assets will be introduced and all billing and valuation costs will be paid by companies including Issuers, debenture trustees, Agency Rating Agencies, etc.,” said Sebi.

The system will grant permits to debenture trustees, issuers and credit rating agencies to review information and will be available to other organizations such as stock exchanges and deposits.

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The information stored in the system will be signed cryptographic, time stamped and added respectively to the ledger. It will provide a guaranteed track of research done.
In addition, as it may be an approved DLT, all relevant stakeholders will be able to access their share of information in the distributed ledger and transaction history in the DLT ledger will be fully documented.

Transaction details will only be shared with required stakeholders on an informed basis.
According to Sebi, DLT enables the terms of an agreed system that are automatically activated when certain conditions are met. Therefore, it will enable you to set up a system that will not allow additional charges against any asset, if the charge is already built on the current value of the asset.

“The plan will therefore be a fully-fledged case register and will achieve its objectives – what security the borrower has and who he or she shares with,” comments Sebi.

The new system will be implemented on April 1, 2022, the Securities and Exchange Board of India (Sebi) said.

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