SEBI Seeks Pan-Exchange Platform To Reduce Investor Risk During Glitches
Exchanges will have to track glitches and suo moto initiate the IRRA service when needed.
The market regulator has asked stock exchanges and clearing corporations to develop a joint investor risk reduction access platform by October 2023.
This service, once operational, will allow investors to square off open positions and cancel pending orders in the event of a technical glitch hindering trading services.
On Friday, the Securities and Exchange Board of India said in a circular that trading members can ask for the service by following the stoppage of trading rules set by the exchanges.
The watchdog also directed the exchanges to monitor parameters including connectivity, order flow, social media posts, etc., to track glitches and initiate the 'Investor Risk Reduction Access' service when needed, without waiting for requests from trading members.
Exchanges can enable the IRRA service suo motu only when trading services are halted across all exchanges, SEBI said.
Trading members can request the service when their services are affected on one or more of the exchanges they are affiliated with, it said.
Bourses will have to inform investors about the activation of the IRRA service through SMS or email. Exchanges and affected trading members will also have to put up a public notice on their websites announcing the same.
Once enabled, investors can login to the service using either their unique client code or PAN. Access will be authorised through an OTP sent to their registered mobile numbers and email addresses.
The service will allow investors to square off open positions or cancel pending orders across segments and exchanges. The IRRA service shall not permit any action that increases investor risk, SEBI said.
The platform will grant trading members access to the admin terminal, through which they can monitor investors' actions as well as carry out permitted actions 'on instructions of investors.'
"The trading member shall maintain evidence of such instructions. The form of such evidence shall be as specified by SEBI/stock exchanges through various circulars from time to time," the regulator said.
If trading services are disrupted due to a cyberattack, the admin terminal should use a network other than the affected one to protect critical infrastructure, SEBI said. It added that the trading member will be responsible for all obligations on the IRRA platform, including settlement and margin requirements.
Stock exchanges have also been asked to design a detailed framework for reverse migration from the IRRA platform to trading members' systems when the latter is revived. They can decide on this based on the size of the broker, the time required for reverse migration, and the remaining time of the trading session.