NSE hit by tech-glitch; incident raises questions on automated technology

PALAK SHAH | Updated on: Mar 07, 2022
The NSE has been declared guilty of not exercising due-diligence in the co-location case

The NSE has been declared guilty of not exercising due-diligence in the co-location case | Photo Credit: Supreet Sapkal.

NSE says it is working on resolving the issue

NSE was hit by another major technical glitch on Monday a few minutes after the opening bell as prices for several stocks stopped updating on the screen. Then, as the stock prices moved, price updates for Nifty and other indices stopped reflecting on the screen, brokers told Business Line. Monday’s glitch on NSE comes exactly a year after the exchange had to be shut down on February 24 last year due to glitches in the servers.  Monday’s incident has raised several questions on the technology and its automation.

According to the NSE statement, “Trading in all segments is functioning normally. However, NIFTY and BANKNIFTY indices are intermittently not getting broadcasted. The Exchange is working on resolving the issue and shall keep the members informed”.

The glitch has resulted in major chaos in the markets since the NSE is India’s largest trading market place. 

‘Prices not updated, but orders got executed’

Surprisingly, the brokers say that even when the stock prices were not updating on the screen, the trade orders were executed if punched. Also, the derivatives segment that has a higher churn, was working even when cash prices were not updating. Brokers said that it was necessary to investigate if co-location, proximity hosting servers, suffered the same glitch or was the price halt on the screen only for non co-location traders. 

Brokers said that something was amiss since the fact that Nifty index was moving when stock price feeds had stopped suggested that price computation was working and feeds being sent for the same for index calculation. Then why is it that prices were not reflecting on the screen for the larger markets? 

‘Probe needed’

Also, brokers said that the server technology of NSE should be investigated thoroughly because when cash markets stop working the same should happen to the derivatives market. The servers are supposed to have certain ‘auto trip’ technology, which means that even when one segment of the markets i.e. cash or derivatives was not working, the other is tripped automatically to save any chaos and possibility of price manipulation. 

SEBI and NSE are yet to make public their findings with regard to the massive tech glitch of February 2021 that led the exchange to shutdown for nearly four hours.

There is an issue with data feeds for NSE stocks from the exchange across all brokers. Please check 20 depth before placing orders or place orders on BSE. Order placement is not affected. We're checking this with NSE, stock broker Zerodha issued a statement.

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Published on March 07, 2022
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