The Securities and Exchange Board of India (SEBI) on Thursday said it will take all necessary measures to ensure rectification of the underlying causes for the technical glitch witnessed by the National Stock Exchange (NSE) on Wednesday.
The technical glitch affected the online risk management system leading to shutdown of trading on NSE. Trading was halted from 11:40 am to 3:30 pm and resumed at 3:45 pm till 5 pm.
"SEBI has already advised NSE to expeditiously carry out a detailed root cause analysis of the trading halt and also to explain the reasons for trading not migrating to the disaster recovery site, as per the prescribed norms. SEBI would take all necessary measures to ensure rectification of the underlying causes including addressing institutional deficiencies," the market regulator said in a statement.
Despite the trading halt, the framework of interoperability put in place by SEBI facilitated market participants to continue their transactions at other stock exchanges, thereby allowing them to seamlessly trade/square off their existing positions, it said.
"The same is evident from the fact that the trading turnover at BSE in equity segment jumped to Rs 40,600 crore on February 24, 2021 as compared to an average daily trading turnover of approximately Rs 5,200 crore during the previous 30 days," SEBI added.
Besides, the decision to extend the market timings also enabled investors to square off their existing positions.
Market Infrastructure Institutions (MIIs) like stock exchanges and clearing corporations have the necessary experience and expertise to deal with operational aspects of the functioning of the market under a transparent framework laid down by SEBI, it said.
The market regulator said it was in constant touch with NSE officials about the glitch and continued to monitor the situation closely.
"NSE informed that it was continuously working on resolution of the problem and that it would intimate the market regarding resumption of trading once the issue gets resolved. Market participants were notified by NSE at 3:17 pm that trading will resume from 3:30 pm and trading hours were extended from 3.30 pm to 5.00 pm at NSE, BSE and MSEI," SEBI said.
The market regulator said it has a comprehensive framework to deal with incidences of technical glitches at MIIs. It also pointed out that trading outages are an area of concern in other important jurisdictions as well.
"Exchanges in UK, Japan, Australia and New Zealand have suffered trading outages in the recent past," it said.