Stocks

Brokers shoot off letter to NSE over technical glitch

PALAK SHAH Mumbai | Updated on November 19, 2019 Published on November 19, 2019

Brokers allege financial loss; NSE says operations resumed after 11.15 a.m.

Brokers have complained to National Stock Exchange (NSE) about huge disruption in trading activity at the exchange platform. In a letter today to the exchange, ANMI, an association of NSE members said many brokers were suffering huge financial loss as their margin related files could not be updated.

This is the second major incident after September 24 when a ‘mysterious tech glitch had disrupted trading at NSE.’ Such glitch and disruption at NSE has continued despite a stark warning issued by the exchanges’ former chairman Ashok Chawla in January 2018. Chawla had acknowledged NSE’s “legacy technology issues and situation as a black swan event” in a letter written to the exchange employees then.

The Tuesday’s letter from brokers said, “Members are facing, since the opening of the market today, a severe and serious problem with NSE software ‘Eneat,’ ‘Notis’ & ‘Nmass’ (with regard to) connectivity for more than 30 minutes. The problem is continuing and members are not able to login to ‘connect2nse,’ ‘CIM,’. It is becoming very difficult for members to handle such situations. Such issues were becoming a ‘regular’ problem with NSE.”

The letter also mentions that there were (connectivity) issues even with National Clearing Corporation, NSE’s clearing and settlement arm, and cash market was not working. Brokers who spoke to Business Line said connectivity issues at NSE were being witnessed since the start of trading on Tuesday and many of their margin positions were being shown as having exceed the threshold limit forcing them to square-off their trades. The letter also says that relationship manager of NSE were not responding.

NSE response

NSE spokesperson said, ‘’The trading systems were working normally. Some members faced problems with the support systems of the exchange due to an inadvertent error on part of the vendor. Normal operations resumed from 11:15am onwards."

In January 2018, Chawla said, “Yesterday’s technical glitch is, proverbially speaking, one more straw on the camel’s back. While such a situation is a Black Swan event, it unfortunately puts the NSE in the spotlight for the wrong reasons. We have handled this effectively, which is indeed our responsibility as the largest exchange of the country.” The letter was issued just a day after the NSE hit by a software glitch that shut down its trading platform for three hours.

This year on September 24, clients of few large brokerages could not square-off their positions at NSE as price feeds had stopped coming. But the tech glitch was resolved by NSE before the market closed, the exchange spokesperson had said then. Brokers anticipated that such a glitch could have been due to massive spurt in options trading volume after just a day after the near 500 points gains in Nifty index. Prior to this on May 31, the Bank Nifty index of NSE had crashed by 1000 points only to recover in 15 minutes. The crash triggered huge stop loss of traders as large long positions were cut even as general sentiment was buoyant on anticipation of a slew of announcements by Narendra Modi 2.0 government. The benchmark indices Sensex and Nifty were down nearly 1 per cent around noon that day, but they too recovered. Only the Bank Nifty’s fall was steeper.

Published on November 19, 2019
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