SEBI imposed a fine of Rs 1 crore on CDSL! Cyber ​​Security Fails Massively; Investigation revealed the truth

• SEBI takes big action on CDSL

• A fine of Rs 1 crore was imposed

• Understand what is the cause

Securities market regulator SEBI on Monday issued notice to Central Depository Services (India) Limited (CDSL) was slapped with a hefty fine of Rs 1 crore. The fine was imposed due to cybersecurity lapses related to a malware attack in November 2022 that crippled the company’s systems. SEBI also alerts investors about various risks from time to time.

What action was taken against the officers of CDSL?

In this entire case, SEBI closed its ongoing investigation against CDSL’s former Chief Information Security Officer, Rajesh Nadkarni, and former Chief Technology Officer, Amit Mahajan, without imposing any monetary penalty. SEBI accepted that Rajesh Nadkarni and Amit Mahajan cannot be held personally responsible for these lapses.

This entire case is related to the malware attack that took place on 18 November 2022. This order is related to the malware attack that took place on 18 November 2022, which disrupted several critical systems at CDSL. In its 88-page order, the market regulator said CDSL failed to classify its Internet-facing Active Directory Federation Services (ADFS) server as a significant asset. Not only this, the company skipped it from Vulnerability Assessment and Penetration Testing (VAPT) and failed to implement basic cyber security measures despite regulatory requirements.

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On what basis SEBI fixed the amount of penalty?

While fixing the penalty, SEBI considered the vital role of depositories in maintaining market integrity and investor confidence. The impact of cyber threats on such market infrastructure institutions is not limited to depositories, Sebi said. Additionally, SEBI said that after the malware attack CDSL It has also considered the corrective steps taken and the financial penalty of Rs 10 lakh already separately imposed under its Standard Operating Procedure (SOP) for reporting cyber security incidents.

A fine of Rs 1 crore will have to be paid within 45 days

Accordingly, SEBI has imposed a penalty of Rs 90 lakh under the SEBI Act and Rs 10 lakh under the Depositories Act on CDSL for non-compliance with various cyber security and safety requirements prescribed by the regulator. Sebi has directed CDSL to pay a fine of Rs 1 crore within 45 days.

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