Stocks

NSE tech glitch: FM seeks SEBI probe report within 21 days

PALAK SHAH Mumbai | Updated on March 04, 2021

Finance Minister Nirmala Sitharaman has asked market regulator SEBI to submit its initial report on the tech glitch at the National Stock Exchange (NSE) within three weeks, sources told BusinessLine. SEBI chairman Ajay Tyagi was called to the Finance Ministry for a meeting with the FM on Thursday, the sources added.

Apart from the FM and SEBI chairman, others present at the meeting included secretaries from all departments linked to the Finance Ministry.

The NSE, which is the world’s largest derivative exchange, suspended trading for four hours on February 24 after Bank Nifty and Nifty index calculations and data feed started facing problems. The tech glitch occurred just a day ahead of the monthly derivative expiry which usually witnesses heightened activity.

The FM has already said that glitch may cost ‘immensely’. While the NSE has blamed telecoms operators and internet providers for the glitch, the fact that no other brokers or exchanges complained about connectivity issues has blunt NSE’s knee-jerk reasoning.

Telecom operators whom BusinessLine spoke to said that connectivity issues don’t persist for four hours unless there is natural disaster.

Also a day after the glitch, SEBI had issued a statement that interoperability was working fine. But the FM took note of the BusinessLine report on February 26, which said that BSE had complained about interoperability failure at the NSE. The FM in a statement acknowledged that “interoperability may have had issues.”

During the glitch the NSE also failed to switch to Disaster Recovery (DR) as per the protocol in 45 minutes after suspending trading. Usually, DR site can be activated with no loss of time when risk management fails at the primary site.

According to the sources, protocols were not followed by the NSE even in restarting trading at 3.30 pm. Between 3 pm and 3.20 pm most brokers squared-off intra-day client positions while the NSE remained silent till 3.17 pm about the reopening. For the first time, the trading was extended for 90 minutes on that day.

Stock fell sharply between 3 pm and 3.30 pm and recovered fully when the NSE was reopened. However, not many retail players could trade post 3.30 pm, brokers complained in a letter to SEBI.

Published on March 04, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like