SEBI says measures will be taken to rectify NSE glitch
What's the story
On Thursday, the Securities and Exchange Board of India (SEBI) said it will take necessary steps to rectify the causes for the four-hour long interruption in trading on the National Stock Exchange (NSE) on Wednesday. In its statement, the regulatory body also said it will address any institutional deficiencies which may have played a role in the outage.
Trading halted
NSE claims issues with telecommunication links caused interruption
NSE claimed the trading was halted due to "issues with the links with telecom service providers". SEBI has already instructed the securities exchange to perform a detailed analysis of the root cause for the technical issue. The NSE added that the lack of an "online risk management system" led to the trading halt. It is awaiting an analysis report from its telecom service providers.
Details
SEBI allowed investors to trade at other stock exchanges
The outage caused significant problems for market intermediaries and other participants. Meanwhile, SEBI highlighted that its "framework of interoperability" allowed transactions to be continued at other stock exchanges. SEBI said the same is evident from the fact that BSE's equity trading turnover rose to Rs. 40,600 crore on February 24, compared to the daily average of Rs. 5,200 crore over the last 30 days.
Framework
SEBI extended trading hours; Will introduce new technical glitches framework
SEBI explains that the interoperability framework allows an entity trading in the market to transact on multiple platforms. The decision to extend market timings following the outage also allowed investors to square off and trade existing positions, the regulatory body added. In the statement, SEBI reassured investors that a new framework is being deployed to address technical glitches at Market Infrastructure Institutions (MIIs).
Citing examples
MIIs must submit analysis report to SEBI following an outage
Under the new framework, MIIs must submit failure analysis reports to SEBI. The report will then be presented before SEBI's Technical Advisory Committee (TAC) which includes eminent academicians and technocrats. SEBI's statement also touched upon the fact that outages and interruptions during trading recently occurred at stock exchanges in Japan, UK, New Zealand, and Australia.