SEBI’s September 15, 2026 consultation paper proposing stronger Business Continuity Plan and Disaster Recovery arrangements for Market Infrastructure Institutions has brought a deceptively simple question to the centre of financial-market resilience. What happens to a customer when the system stops working at precisely the moment the customer needs it most? The consultation covers the resilience of market infrastructure institutions and proposes measures around recovery arrangements, testing and the ability of systems to withstand disruption, making it part of a wider regulatory focus on whether financial infrastructure can continue functioning under abnormal conditions.
For an engineering team, a five-minute outage may appear as a short-lived interruption in availability, a spike in latency or a contained technology incident; for a trader, investor or institution attempting to act while markets are moving, those same five minutes can mean a stop-loss that did not execute, a margin requirement that could not be addressed, a transaction whose status remains uncertain or an opportunity that disappeared before the screen came back to life.
Financial markets operate on a different definition of time from most other businesses. A restaurant can recover from a five-minute point-of-sale failure by taking orders manually, an office can continue a meeting while its internet connection is restored and a consumer can generally retry a digital transaction later. Markets can move substantially during those same minutes, and the financial consequences of being unable to access a position or execute an instruction can continue long after the technology has recovered. This creates a critical distinction between system recovery and customer recovery. The former can be measured in minutes; the latter may take considerably longer because the customer is left asking what happened, whether an instruction was received, whether money moved, whether a position changed and whether the same problem can happen again.
That gap is where an operational incident can become a client-retention problem. A financial institution may close an incident ticket once the platform is restored, but the client may still be calculating the consequences of being unable to transact. If the interruption affected several customers during a period of volatility, the damage may extend beyond individual transactions into the institution’s reputation for reliability. In digital finance, where competing brokers, banks, payment providers and investment platforms are only a few taps away, reliability itself has become part of the product.
SEBI’s latest consultation is significant in that context because business continuity and disaster recovery are increasingly being examined through the lens of actual operational resilience rather than the mere existence of a contingency plan. A recovery site that works during a scheduled demonstration may behave very differently when confronted with extraordinary transaction volumes, simultaneous user requests, database pressure and interconnected system failures. The difficult test is not simply whether an institution can switch from one environment to another, but whether it can continue to deliver the functions that customers depend upon once the switch has taken place.
That distinction becomes particularly important in a market ecosystem where no financial institution operates entirely alone. Exchanges, clearing corporations, depositories, brokers, custodians, banks, payment systems, technology providers and data services interact continuously. A failure in one part of the chain can produce consequences somewhere else, leaving the customer with little interest in which component technically caused the disruption. The customer sees one application, one account and one institutional relationship. The infrastructure may be distributed, but the expectation of responsibility remains concentrated.
There is another problem that recovery plans often have to confront: Restoring the system does not necessarily restore the transaction history with sufficient certainty. An order may have been received but not acknowledged. A payment may have been debited but not reconciled. A securities instruction may have reached one system but not another. A customer may have pressed a button twice because the first attempt produced no response. Once the platform returns, the institution has to establish not merely that the database is available but what actually happened during the period of disruption.
This is where data recovery becomes different from service recovery. A technically successful restoration can still leave customers uncertain about whether they should retry an instruction, wait for a confirmation, contact support or take another action. The institution may have reconstructed its records correctly while the customer remains unsure about the financial consequences. That interval between technical restoration and customer certainty can become one of the most commercially damaging aspects of an outage.
Communication therefore becomes part of resilience rather than an activity that follows resilience. During an incident, customers need to know what is unavailable, what remains operational, whether they should continue attempting transactions, whether funds or securities are affected and when another update can be expected. Silence can multiply uncertainty because customers begin relying on repeated login attempts, informal messages, social-media reports or assumptions about what may have happened. A concise, credible and regular communication can prevent a technical problem from becoming a trust problem.
“The duration of an outage and the duration of its consequences can be very different things. A financial institution may restore a platform in minutes, but restoring customer confidence can take considerably longer if the interruption occurred at precisely the moment when the client needed certainty, liquidity or execution,” FSCL said. “Operational resilience therefore has to be understood as a client-retention issue as much as a technology or compliance issue. The real test is not simply whether systems return to normal, but whether the client can continue to trust the institution’s ability to function when markets, transactions and financial decisions are under stress.”
The commercial consequences can also appear gradually. A customer who experienced one serious interruption may not close the account the next morning. Instead, the customer may open a secondary account, begin routing selected trades elsewhere, reduce the amount of money maintained on the platform or test another provider during the next market event. The original institution may continue reporting the customer as retained even though the economic relationship has begun to weaken.
That makes resilience an increasingly important component of customer analytics. Institutions need to know not only whether a service recovered within the required time, but what happened to customer behaviour afterwards. Did transaction volumes decline? Did customers move new money elsewhere? Did support calls increase? Did certain segments begin using alternative channels? Such information can reveal whether an operational event remained contained or became the beginning of a wider relationship problem.
The deeper lesson from the regulatory focus on business continuity is therefore commercial as much as technical. The value of a financial platform is not tested only when markets are calm and systems are operating normally. It is tested when volatility rises, transaction volumes surge, technology comes under pressure and the customer needs the institution to function without explanation or excuse.
A five-minute outage is therefore rarely just five minutes. It is five minutes in which the institution's promise to the customer is tested, five minutes in which a competitor can become an alternative and five minutes that can influence a relationship built over five years. The system may return to green status long before the customer decides whether trust has returned with it.