SEBI CSCRF Audit: New Circulars – Why You Must Be Ready Before FY25
SEBI CSCRF Audit: New Circulars – Why You Must Be Ready Before FY25
The SEBI Cyber Security and Cyber Resilience Framework (CSCRF) continues to evolve as cyber risks increase across India’s capital markets. In the last two years, SEBI has strengthened its expectations through multiple circulars especially around cyber incident reporting, resilience testing, governance responsibilities, and third-party oversight.
As a result, intermediaries can no longer treat cybersecurity as a technical function alone. A SEBI CSCRF Audit now evaluates technology, governance, operations, vendor dependencies, and data handling in a much deeper way than before.
This blog explains the most common CSCRF audit gaps, the latest SEBI circular requirements, and why all market entities must complete audits and remediation before FY25.
As a result, intermediaries can no longer treat cybersecurity as a technical function alone. A SEBI CSCRF Audit now evaluates technology, governance, operations, vendor dependencies, and data handling in a much deeper way than before.
This blog explains the most common CSCRF audit gaps, the latest SEBI circular requirements, and why all market entities must complete audits and remediation before FY25.
Understanding SEBI’s Recent CSCRF Circular Updates (2023–2024)
1. Enhanced Cyber Incident Reporting Framework
- Immediate reporting of significant cyber incidents
- Detailed incident timelines, root-cause analysis, and containment logs
- Reporting to stock exchanges, SEBI, and CERT-In simultaneously
This has increased audit checks around logging, monitoring, and incident readiness.
2. Mandatory Cyber Resilience Drills
- Frequent DR drills
- Evidence of successful failover testing
- Validation of RTO/RPO alignment with SEBI norms
3. Board and Senior Management Accountability
- Cybersecurity responsibilities clearly assigned at senior levels
- Periodic board reporting of cyber posture
- Documentation of governance oversight
4. Stricter Vendor and Third-Party Security Governance
- Vendor categorization based on risk
- Vendor audit reports
- Security clauses in contracts
- Monitoring of outsourced IT providers
5. Higher Scrutiny on Network & Application Security
- MFA everywhere
- Segmentation of production/non-production environments
- Continuous monitoring for external-facing systems
Top SEBI CSCRF Audit Gaps Found in 2024–2025
- Outdated cybersecurity policies not aligned with SEBI’s latest circulars
- Weak access control and privileged account mismanagement
- Incomplete VAPT remediation and absence of closure evidence
- Poor logging and monitoring, no SIEM or alert-based detection
- Unstructured vendor cybersecurity governance
- Backup and disaster recovery drills not tested or documented
- Weak incident response processes and untested IR plans
- No user awareness training or phishing simulation programs
- Flat networks with insufficient segmentation
- Delay in regulatory reporting and incomplete evidence records
Why Entities Must Complete SEBI CSCRF Audit Before FY25
- Stricter inspections begin in FY26: Entities showing recurring gaps in FY25 may fall into high-risk monitoring categories.
- FY25 is the last comfort window for remediation. Completing audits early helps remediate issues before penalties apply.
- Vendor governance rules tighten in 2026. Entities must prepare vendor security programs now.
- FY25 evidence becomes the FY26 baseline. Logs, reports, drills, and submissions will be checked.
- DPDP + SEBI convergence begins 2026. Privacy and cyber audits will begin integrating.
What Market Intermediaries Should Prepare for in 2026
- 24×7 continuous monitoring & SOC integration
- Zero Trust adoption
- Micro-segmentation
- Frequent ransomware & breach simulation drills
- Integrated cyber + privacy governance frameworks
- Stricter third-party audits
Need help preparing before FY25?
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FAQs — SEBI CSCRF Audit
Q1. What is covered in a SEBI CSCRF Audit?
Cybersecurity controls, data protection, access management, monitoring, IR readiness, vendor governance, and DR capabilities.
Q2. How often must intermediaries conduct CSCRF audits?
Annually, with additional internal reviews after major system changes or incidents.
Q3. What happens if cyber incidents are not reported on time?
Compliance violations, penalties, and increased regulatory scrutiny.
Q4. Does SEBI require evidence for every control?
Yes — logs, screenshots, drill reports, patches, policies, approvals, and training records.
Q5. Why is vendor security important?
Third-party lapses are treated as your entity’s failure.
Q6. What is the role of VAPT?
Identifies vulnerabilities — SEBI focuses on remediation and proof of closure.
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