Indian markets regulator Securities and Exchange Board of India (SEBI) is planning to build a new data centre as a part of its IT upgradation efforts.

This data cente will host a dedicated private cloud infrastructure, according to its 2019 annual report. Further, SEBI will also focus on data analytics to improve its supervision of the securities market, it said.

Data Centre push

SEBI has adopted private cloud strategy for a large part of its infrastructure. “The proposed private cloud solution will be the enabling technology which will be scalable, inter-operable, and elastic and support big data analytics. Going forward, the private cloud solution will provide infrastructure, storage and computing capacity to many existing and upcoming projects,” it said.

The private cloud strategy will help the markets regulator optimise its resource utilisation and provide flexibility across various hardware devices and softwares. It will also allow the markets regulator to integrate, host and scale new or existing applications much faster, it said, the regulator added.

SEBI will implement a large scale tier 3+ data centre this year, at its Bandra Kurla Complex office in Mumbai. As part of building the data centre, existing infrastructure from other data centres in Mumbai will be consolidated to the new data centre, SEBI said. It added that the new data centre will also host the regulator’s private cloud infrastructure.

“SEBI has started work on a data lake project which would have the capability to store and retrieve quickly, a large amount of structured, semi structured and unstructured data. This data lake project will support advanced analytical tools, such as artificial intelligence and machine learning (AI/ML), deep learning, big data analytics, pattern recognition, processing of structured and unstructured data, text mining and natural language processing thereby significantly augmenting surveillance capabilities,” said Ajay Tyagi, chairman, SEBI.

“Given the increasing volume and complexity of activity in the securities market and the resultant explosion in volume and complexity of data, SEBI has felt an increasing need to develop data analytics capability within the organization,” SEBI said. The regulator hopes this initiative will help in policy formulation, surveillance and investigations and automating various functions going forward.

The markets regulator said that it has adopted a ‘Hub and Spoke’ model as part of its data analytics initiative. While the data warehouse team of the IT department will act as a Hub for data residing with the regulator, individual data analytics teams in each of SEBI’s various departments. It plans to use this model to implement two projects, namely off-site inspection of brokers and offsite inspection of mutual funds.

SEBI also plans to implement a data lake in 2021, which will leverage artificial intelligence, machine learning and deep learning that will analyse and process vast amounts of structured, semi structured and unstructured data.

These developments need to be seen in the backdrop of the regulator getting embroiled in a three-year investigation into the co-location case. The regulator had to step in as National Stock Exchange, one of the bourses, gave ‘preferential access’ to some of its brokers through a co-location facility at the stock exchange.