The Securities and Exchange Board of India, in a circular issued on Thursday, said the National Stock Exchange and the BSE will serve as alternative trading venue for each other if either of them gets hit by a technical glitch or outage.
This interoperability of bourses, aimed at ensuring business continuity in case of outage, will be applicable for cash, derivatives, currency derivatives, and interest rate derivatives. The rule will come into effect from Apr. 1, 2025.
“Upon discussion with exchanges, it has been decided that, to begin with, NSE would act as an alternative trading venue for BSE and vice-versa,” SEBI said.
The exchanges are required to make a standard operating procedure, providing details to be followed in case an outage hits either of the two main exchanges, according to a circular released by SEBI.
The SOP will also contain any necessary changes to the systems of stockbrokers and clearing corporations to implement the interoperability measures for end investors as mentioned in the circular.
The SOP is required to be submitted to SEBI within 60 days from the circular being issued.
According to the regulator, the exchange that has encountered the outage must follow the existing rules to manage the glitches and inform the alternative venue and SEBI within 75 minutes. Within 15 minutes of the alert being issued, the alternative trading venue will start its business continuity plan as per the SOP, it added.
The exchanges and clearing corporations must take required steps to put in place infrastructure and systems to implement interoperability mechanism, it added.
For stocks that are listed on only one main exchange, reserve contracts for scrips could be created, the circular said. These reserve contracts are to be invoked at the time of outage on the other exchange, it added.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
