SEBI Pulls Up NSE: Seeks Report On Trading Halt; Asks Why Market Was Not Shifted To Disaster Recovery Site

SEBI Pulls Up NSE: NSE informed that trading was halted at 11.40 am today due to "issues with the links with telecom service providers." Dealers with positions in the futures and options segment came under added pressure as they were unable to square off their positions ahead of the expiry of the current month’s derivative contracts.

SEBI seeks report from NSE on trading shutdown over tech glitch | File Image

Market regulator SEBI had advised NSE to carry out a detailed root cause analysis of the "trading halt" witnessed at NSE on Wednesday and has asked India's largest exchange to submit its report at the earliest. The market watchdog also asked NSE to explain the reasons for trading not migrating to the disaster recovery site.

NSE informed that trading was halted at 11.40 am today due to "issues with the links with telecom service providers." Dealers with positions in the futures and options segment came under added pressure as they were unable to square off their positions ahead of the expiry of the current month’s derivative contracts.

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"SEBI was in constant touch with NSE officials and continued to monitor the situation closely and also advised NSE to keep the market participants updated about the evolving developments," said SEBI in a statement.

The "trading halt" continued till 3.30 pm. "In view of the exceptional situation arising out of the "trading halt," it was decided to extend the trading hours from 3.30 pm to 5.00 pm at NSE, BSE, and MSEI," said the statement.

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"A similar issue in index feeds had recently happened a few months ago but trading was not completely halted. Instead, trading went on with the glitch in index prices that day. SEBI and NSE need to quickly look at alternatives here if this isn’t getting fixed," said Jimeet Modi, CEO & Founder, Samco Ventures Pvt Ltd.

BSE’s daily turnover — the total value of shares traded — jumped to nine times the average daily turnover at nearly Rs 40,000 crore.

Talking about the market movement amidst the trading halt, Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking, said, “We had a flat to a positive start today and despite global cues were unfavourable in the morning, our markets managed to extend gains towards 14800 in the initial hour. However, all of a sudden, the trading halted on NSE at 11.40 am due to some technical snag. It was very unusual and things worsened when it lasted for a few hours without any clear intimation on further proceedings. This created havoc among the traders’ fraternity because everyone was clueless about their outstanding intraday positions."

"Fortunately, the trading resumed around 3.45 pm as an exceptional case for a short period. Although it almost opened around the same levels, we witnessed a complete gush in the second half of the truncated session. Before anyone could realize, Nifty just hastened towards the 15000 mark," he added.