Stocks

February 24 Tech Glitch:NSE’s Kohinoor data centre under scanner

PALAK SHAH Mumbai | Updated on March 18, 2021

NSE building at Bandra Kurla Complex in Mumbai   -  Supreet Sapkal

Centre said to house servers that are key to index calculation and clearing operations

An alternate data centre of the National Stock Exchange (NSE) located at Kohinoor City in the Kurla west suburb of Mumbai is under a cloud following a probe into the massive tech glitch that led to a four-hour shutdown of the bourse on February 24. The data centre, which the NSE calls near Disaster Recovery (DR) site, is just a few kilometres away from the exchange’s primary data centre at its swanky BKC office.

Market regulator SEBI is probing if a part of NSE’s ‘index calculation and clearing operations’ were being conducted from Kohinoor City data centre instead of its primary site and if the outage had occurred there between 10.05 AM and 10:07 AM, the sources told BusinessLine.

Responding to an e-mail query, the NSE spokesperson declined a comment on this particular aspect. “We will not comment on technical details of the incidents at this stage. The NSE has a primary site at BKC, near DR at Kohinoor for ‘synchronous replication of data’ and a DR at Chennai. All these have been set up and tested in line with SEBI regulations.”

Index data triggered problem

Problems for the NSE on February 24 started with ‘calculation of index data’ in the Bank Nifty and Nifty indices at around 10.07 am. Both indices were not getting updated accurately till up to 11.40 am, after which the NSE suspended trading completely. Otherwise, there were no broker complaints about the connectivity issues between 10.07am to 11.40 am at NSE’s primary BKC site, which ‘disseminates’ data to stock brokers, television channels and wire services.

“Since the NSE said the problem was due to internet service provider links and since the index calculation had stopped, the problem has to lie with the server links that ‘calculate the index.’ It has come to light that some such NSE servers instrumental in index calculation and clearing operations are at Kohinoor City, outside the primary BKC site. SEBI is trying to understand this conundrum of data calculation and dissemination server architecture,” the sources said.

Co-location Vs data centre

The NSE announced the purchase of 28,000 sq ft to 80,000 sq ft office space at Kohinoor City in August 2009 to accommodate its ‘expanding technology infrastructure.’ Then, Ravi Narain and Chitra Ramakrishna were heading the NSE, which was just four months away from launching co-location trading. Since co-location servers should be placed at BKC premises only, for achieving proximity to NSE’s order matching engine, part of other data centre operations was moved to Kohinoor City.

“The NSE calls Kohinoor data centre ‘near DR.’ Perhaps, some primary operations are run from there. On February 24, data replication between the NSE’s BKC and Kohinoor site did not happen. Hence, trading could not be done from the Chennai DR site as per the protocol, sources said.

So far, it is known that data replication between the NSE’s primary site and the DR did not happen even after 30 minutes of trading time loss, the sources said. Another source said that for the Chennai DR site to run, data replication from two Mumbai sites was key. “But data replication happens only when data goes into the storage, which was not the case on February 24 with regard to index data.”

Earlier, Finance Minister Nirmala Sitharaman had asked SEBI to submit its probe report in 21 days. On February 25, the NSE said: “It had multiple telecom links with two service providers to ensure redundancy and we received communication of instability of all their links from both the service providers. While there was no impact to the trading system, this instability affected the online risk management system.”

Published on March 18, 2021

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