A day after what was one of the longest trading halts at the National Stock Exchange (NSE), market regulator has issued a statement on the situation.
Securities and Exchange Board of India (Sebi) in its statement said it would take all necessary measures to ensure rectification of the underlying causes including addressing institutional deficiencies.
The regulator had advised NSE through as a part of its first statement on 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. It reiterated on the same point in a statement issued today as well.
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On February 24, NSE said that trading on the exchange had been halted since 11:40 am due to some problem with its telecom services providers. The exact statement from the exchange read, "NSE has multiple telecom links with two service providers to ensure redundancy. We have received communication from both the telecom service providers that there are issues with their links due to which there is an impact on NSE system."
It further added, "We are working on restoring the systems as soon as possible. In view of the above, all the segments have been closed at 11:40 and will be restored as soon as issue is resolved."
The issue could not be resolved for almost four hours and finally just before market closing NSE informed its brokers that market trading hours will be extended till 5:00 pm.
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Sebi in its statement said the decision to halt trading was taken by NSE based on its own internal assessment regarding the severity of the technical issues it was experiencing at that time.
The regulator in its statement noted that it has put in place a comprehensive framework to deal with incidences of technical glitches at MIIs. MIIs are Market Infrastructure Institutions. Under the framework, MIIs will have to submit a detailed root cause analysis within a time bound manner after which this report to be placed before Technical Advisory Committee (TAC) of Sebi. There is a monitoring mechanism for ensuring corrective action along with appropriate penalty wherever warranted.
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It also pointed out that despite the trading halt, the framework of interoperability put in place facilitated market participants to continue their transactions at other stock exchanges, thereby allowing them to seamlessly trade/square off their existing positions. 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.
