Wed. Feb 1st, 2023

Regulation HK

Financial Regulator

SEBI Issues New Standards for Handling Stock Exchange Outages

2 min read

Outages must be reported within 15 minutes. Updates must be provided every 45 minutes. Trading hours can be automatically extended for other exchanges.

SEBI (Securities and Exchange Board of India) has issued new standard operating procedures for the handling of stock exchange outages.

In a 9 January circular, SEBI said any stock exchange that suffers an outage must report it immediately but not later than 15 minutes from the occurrence of the outage through a broadcast message and by publishing the same on its website.

SEBI said exchanges must communicate the outage to the regulator, market participants, trading members and other market infrastructure institutions.

The affected stock exchange must also provide updates about the ongoing outage in time intervals of 45 minutes normal operations are restored.

SEBI said any extension of trading hours, if applicable, must be disclosed to market participants, other market infrastructure operators, and SEBI one hour and fifteen minutes before the market closure, at the latest.

  • If trading on the affected stock exchange resumes with more than one hour until the scheduled market closure, no extension of trading hours will occur.
  • If trading on the affected stock exchange has not yet resumed with less than one hour until market closure, the trading hours for all stock exchanges will automatically be extended for an additional one and half hours for the day.
  • If the affected stock exchange is not ready to resume trading 45 minutes into the extended trading hours then it shall not resume trading for the remainder of the day.

A re-opening session similar to a normal pre-opening session will be conducted for any resumption of trading following an outage, to ensure effective price discovery.

The new standard operating procedures, published here, are effective immediately.

The new standard operating procedures come after NSE (National Stock Exchange of India) was forced to suspend trading in its cash and derivatives segments in February 2021 after its telecom links were disrupted by construction activity and its backup systems didn’t kick in.

At the time, SEBI responded with the introduction of a series of contingency measures and business continuity and disaster recovery guidelines to minimise disruptions at market infrastructure institutions.

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