The Securities and Exchange Board of India (Sebi) may make it mandatory for market infrastructure institutions (MIIs) to start operations from disaster recovery (DR) sites within 45 minutes if a technical glitch halts trading, sources say.
The market regulator is expected to issue a circular soon in this regard. The move comes in the wake of the technical glitch at the National Stock Exchange (NSE) on February 24 that halted trading for hours.
All main exchanges have an alternative base of operation called DR site to help them conduct operations seamlessly during an emergency.
Sebi had sought a clarification from the NSE over its failure to begin operations from the DR site even after long hours of trading disruption last month.
As per the current rules, MIIs have four hours' time to shift operations to a DR site.
“Sebi may give three months' time to MIIs to implement the new rule,” a source close to the development told Moneycontrol.
The Bombay Stock Exchange (BSE) has its DR site in Hyderabad and the NSE has it in Chennai. The Multi Commodity Exchange’s (MCX) disaster recovery site is based in Ahmedabad. The Metropolitan Stock Exchange has a DR site in Delhi.
Regulations specify that these sites have to be located in different seismic zones from the main exchange.
On February 24, the trading at the NSE was stopped at 11.45 am and remained halted until 3.30 pm.
Market experts say the exchanges are generally reluctant to shift to DR sites as these sites don’t have co-location facility, from where they get a large amount of business.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
