Sebi is taking measures to ensure system security in the quantum computing era: Pandey

The advent of quantum computing could pose major security challenges and Sebi is preparing the system to be secure before its introduction, the capital market regulator chairman Tuhin Kanta Pandey said on Wednesday.

Pandey said quantum computing has the technological capabilities to allow bad actors to compromise passwords, long believed to be highly secure. Therefore, it is necessary to prepare the system on this front.

Sebi has formulated an ‘action plan’ to ensure quantum readiness of all stakeholders it regulates, Pandey said here at the annual GFF.

Much research is being done on quantum computing, which will rely on the principles of quantum mechanics to solve complex problems far beyond the capabilities of classical computers, Pandey said.

The career bureaucrat turned regulator said there is a possibility that quantum computing is coming and once it does arrive, the normal cryptography used to set passwords could be the first to break.

“We have quantum-safe computing (priority) with 2028 or 2029 as the date (when quantum comes) on how we as an industry can prepare to go for quantum-safe cryptography based on an action plan where we discover, we prepare and then we act within the next two to three four years,” Pandey said. Meanwhile, responding to a question on technology neutrality, Pandey said he does not see it being possible to hold shares in paper form for long in a system that has long since moved to dematerialisation. On the concept of technological neutrality, a hotly contested topic, he chose to express his skepticism with a nuanced approach.

“Technological neutrality is actually not feasible,” he said, adding that sticking to paper stocks will not be beneficial and that one should take the best technology position on offer.

Secondly, there is also the aspect of standardization that technologies must adhere to, Pandey said, adding that the Internet would not have been possible without the protocols to connect an entire network of computers.

“You can only achieve technology neutrality to the extent that multiple technologies are comparable and can connect,” he said.

“As a regulator, I would say that we need to adopt and embrace a technology, both for our own good and for the good of the investment community we serve,” Pandey added.