SEBI moots revised guidelines for stock exchange outages

Capital market regulator the Securities and Exchange Board of India (SEBI) has issued the revised standard operating procedures (SOPs) for stock exchanges to follow during an outage, which may affect normal trading operations.

If need be, trading hours could also be extended in such a situation, states SEBI.

The revised guidelines state that stock exchanges must inform brokers, market participants and other Market Infrastructure Institutions (MIIs) about the outage within a 15-minute timeframe. The exchange will have to inform SEBI immediately via email.

In addition, the market regulator has asked exchanges to update about the ongoing outage in time intervals of 45 minutes from the initial intimation.

In the case of a disruption in trading due to an outage in one or more market segments of the stock exchange, trading shall continue in the other unaffected segments of the exchange.

In regard to the extension of trading hours, if applicable, must be stated in the intimation by the affected exchange.

Extension of Trading Hours

The market regulator has issued guidelines related to the extension of trading hours in the following cases.

  • If trading on the affected stock exchange resumes to normalcy at least one hour before the normal market closure time, the trading hours for all stock exchanges would remain unchanged for that day.
  • If the trading fails to resume within one hour before the market closes, then trading hours for all other stock exchanges would get extended for an additional one and a half hours for that day.
  • If trading on the affected stock exchange fails to resume normalcy, 45 minutes after the normal market closure, then no further trading will be allowed on that particular exchange for the day. However, other stock exchanges will continue to operate for an extended time to enable smooth closure and settlement of intraday operations.
  • If the disruption in trading due to an outage happens during the last trading hour and 15 minutes before the market closure, trading hours for all stock exchanges will be extended by one and a half hours.
  • The extension in trading hours is required to be intimated to market participants, other MIIs, and the market regulator latest by one hour and fifteen minutes before the market closure.
  • The affected exchange is required to give an advanced intimation of 15 minutes to various market participants related to the resumption of trading and a pre-opening session similar to the normal pre-opening session would be conducted.
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