India’s leading stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), emerged unaffected following a global cybersecurity update by CrowdStrike that disrupted systems equipped with Microsoft Windows. In contrast, major international exchanges, including the London Stock Exchange, experienced significant outages.
IT expenditure of Indian stock exchanges and regulators
The NSE allocates Rs 570 crore to its IT budget, as reported by Business Today. This expenditure pales in comparison to its international counterparts: the London Stock Exchange Group (LSEG) spends Rs 6,556 crore, NASDAQ allocates Rs 1,949 crore, and the Hong Kong Exchange (HKEX) tops the list with Rs 6,807 crore.
In terms of total costs, NSE’s expenditure stands at Rs 3,036 crore, while NASDAQ and HKEX incur much higher costs at Rs 23,734 crore and Rs 69,313 crore, respectively. Despite the disparity in spending, the NSE achieved a revenue of Rs 12,692 crore, compared to NASDAQ’s Rs 32,574 crore and HKEX’s impressive Rs 171,575 crore.
Sebi’s IT spending
The Securities and Exchange Board of India (Sebi) spends Rs 93 crore annually on IT, significantly less than Australia’s ASIC at Rs 205 crore and Singapore’s MAS at Rs 420 crore.
Resilience in diversity
The ability of Indian exchanges and their regulator to withstand the global cybersecurity disruption despite lower IT expenditure highlights the importance of diversity in systems architecture. Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister (EAC-PM), echoed this sentiment on social media.
“This is why genetic diversity is important. A unified, interconnected global system is a bad idea. A less interconnected system may appear inefficient but will be more resilient. This is an important conclusion of the Complex Adaptive Systems based approach to AI regulation,” Sanyal wrote on X (formerly Twitter).
Sanyal’s research advocates for a specialised AI regulator with a comprehensive mandate and a national registry of algorithms. He further emphasises that AI systems, functioning as Complex Adaptive Systems (CAS), can exhibit unpredictable interactions and evolution, potentially leading to significant and unforeseen consequences.
First Published: Jul 20 2024 | 3:04 PM IST
