Traders and bankers from across the world found themselves in a bind after a botched update of a widely used cybersecurity program owned by CrowdStrike Holdings took down Microsoft systems. CrowdStrike Chief Executive Officer George Kurtz said the fault had been identified and “a fix has been deployed.” Amid this turmoil, India's stock exchanges, the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), emerged unscathed. Unlike their global counterparts, the BSE and NSE reported no operational disruptions.
Sebi spends relatively modestly on IT compared to its global counterparts. The regulator's yearly IT expenditure stands at Rs. 93 crore, significantly lower than Australia's ASIC at Rs. 205 crore and Singapore's MAS at Rs. 420 crore.
Additionally, Sebi's IT assets are valued at Rs. 309 crore at cost and Rs. 59 crore at book value, compared to Rs. 697 crore and Rs. 164 crore for ASIC, respectively. Despite these lower expenditures, Indian exchanges have demonstrated robust operational resilience, as evidenced by their stability during Friday's outage.
When comparing major IT expenditures across various stock exchanges, the NSE maintains a competitive edge with an IT cost of Rs. 570 crore. This is relatively modest compared to the London Stock Exchange Group (LSEG) at Rs. 6,556 crore and NASDAQ at Rs. 1,949 crore. Despite this lower IT expenditure, NSE's total cost stands at Rs. 3,036 crore, with a total revenue of Rs. 12,692 crore.
Statement of major IT expenditure across various stock exchanges (in Rs crore)
This contrasts sharply with NASDAQ's total cost of Rs. 23,734 crore and total revenue of Rs. 32,574 crore. The Hong Kong Exchange (HKEX) shows the highest figures with an IT cost of Rs. 6,807 crore, a total cost of Rs. 69,313 crore, and a total revenue of Rs. 171,575 crore.
This comparison highlights the cost-efficiency and revenue-generation capabilities of the NSE amidst its global peers. "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," Sanjeev Sanjyal, member of the Economic Advisory Council to the Prime Minister (EAC-PM), wrote on X.
Sanyal had last year suggested CAS framework for AI regulation, recommending the establishment of a specialist AI regulator with a wide-ranging mandate and a national registry of algorithms. "AI systems function like CAS, with components that interact and evolve in unpredictable ways. This complexity can trigger butterfly effects, where small changes lead to significant and unforeseen consequences," explained the EAC-PM research paper.