Sebi's guidelines related to testing of software and trading systems are already applicable for stock exchanges and would now be applicable for commodity bourses.

Commodity markets have come under the regulatory ambit of Sebi following the merger of Forward Markets Commission (FMC) with the capital market watchdog in September.

Since new software or changes to the existing software without proper testing may affect the integrity of the markets, the regulator said the guidelines are being made applicable to commodity markets also, Sebi said in a circular.

The latest move would help prevent possible manipulations of softwares being used in the commodity market.

On account of technological developments and innovations, Sebi said members of exchanges have multiple options for using software - either those provided by the bourses or developed in-house - for trading and risk management related activities.

The circular would come into force for commodity markets from April 1, 2016. The guidelines pertain to various aspects of trading systems including testing of software, approval of software used by brokers/members and sharing of Application Programming Interface (API) specifications by the members.

Besides, a penalty would be levied in case there is malfunctioning of software used by brokers or members.

Sebi had issued the guidelines for the securities market to "avoid any disruption like event due to malfunctioning of software used by the trading members/brokers, it was felt necessary to strengthen the process of testing of software before deployment".

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