By bigbreakingwire 
Securities and Exchange Board of India (SEBI) has settled a regulatory case against Paytm Money after the company paid ₹45.5 lakh to resolve allegations of non-compliance. This settlement allows Paytm Money to avoid further legal action on the matter.
What Led to the Case?
The issue began when SEBI issued a show-cause notice to Paytm Money on July 24, 2024, over violations related to the regulator’s technical glitch framework. SEBI accused the company of failing to meet key operational and regulatory standards necessary for maintaining secure and efficient trading services.
Key Violations Identified by SEBI
Failure to Meet Alert Thresholds
SEBI found that Paytm Money did not meet the required 70% threshold for generating timely alerts on critical assets. These alerts are crucial in protecting investors, particularly during market volatility. The shortfall raised concerns about the company’s risk management practices.
Lack of System Performance Documentation
During an inspection, Paytm Money failed to provide necessary records on how its systems handled peak trading loads. This raised doubts about whether its infrastructure could manage high trading volumes during market surges or technical disruptions.
Gaps in Monitoring and Analytics
The company did not fully connect its critical systems to SEBI’s Log Analytics and Monitoring Application, a tool used for real-time tracking of system performance and potential failures. This omission posed risks to operational stability and investor security.
Skipped Disaster Recovery Drill
Paytm Money did not conduct a mandatory disaster recovery (DR) drill between April and September 2023. These drills ensure that a company can quickly recover from technical failures. SEBI viewed the absence of a live drill over an extended period as a sign of weak emergency preparedness.
Settlement and Outcome
By paying ₹45.5 lakh, Paytm Money has closed the matter with SEBI, avoiding prolonged legal proceedings. However, the case highlights the importance of robust risk management and compliance in financial services, especially in protecting investors and maintaining market stability.
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