SEBI Chairman Unveils Investor Risk Reduction Access - IRRA Platform
Moneylife Digital Team 21 November 2023
Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch launched the much-awaited investor risk reduction access (IRRA) platform at the Bombay Stock Exchange (BSE). The IRRA platform reduces risks faced by investors in the eventuality of technical glitches at the trading member (TM) end at primary and disaster recovery sites. The move comes against the backdrop of a rise in instances of glitches in TMs' systems. In such cases, investors with open positions are at risk of the non-availability of avenues to close their positions, particularly if markets are volatile.
 
 
While launching the platform at BSE, the SEBI chief emphasised the importance of creating layers of protection for investors during unforeseen technical challenges. "The main goal of the IRRA platform is to safeguard investors' funds and ensure their positions are protected. MIIs should adopt a long-term investment strategy, where there is a greater likelihood of wealth generation rather than losing money daily in the futures and options (F&O) segment," Ms Puri Buch says.
 
Last month, market infrastructure institutions (MIIs) soft-launched the IRRA platform. The platform is available to TMs supporting internet-based trading and security trading through wireless technology for their investors. IRRA, however, would not be available for algo trading and institutional clients.
 
IRRA can be invoked by TMs when they are faced with a technical glitch at their end, impacting their ability to service clients across exchanges from both - the primary site and disaster recovery site, where relevant. 
 
On invocation, after basic checks, the platform downloads trades of TM from all the trading venues. It sends SMS and email to investors using internet trading or wireless technology along with a link to access IRRA. Investors using this link can review the status of their investments and orders and place orders for squaring off or closing positions.
 
The market regulator asked the stock exchanges to monitor parameters like connectivity, order flow and social media posts and suo moto initiate the enablement of the service if needed, irrespective of any such request by the trading member.
 
The trading member will continue to be responsible for all the activities on the IRRA for all obligations, including settlement and margin requirements, SEBI says. (Read: SEBI Asks Exchanges, Clearing Corporations To Set Up Investor Risk Reduction Access Platform)
 
In recent times, several stockbrokers have frequently faced technical issues on the trading terminals offered by them to their clients, which, in many instances, has resulted in monetary losses for clients. In many cases, stockbrokers have undergone significant and minor technical glitches. 
 
Earlier this month, Zerodha's Kite suffered another technical glitch forcing users to post complaints on X. After multiple complaints by users, Zerodha acknowledged the issue in their bulletin and updated at 12.09pm, saying that the issue had been resolved.
 
"Due to a technical issue, some of our users faced issues viewing the order book, positions, holdings and funds page. This issue is now resolved. As a precautionary measure, affected clients can only exit positions. Trading activity remains unaffected for the rest of our users," Zerodha posted on X.
 
Zerodha also went down on 31st October, with multiple users complaining about the technical glitch related to order placement, with orders not being executed and other problems, such as orders not exiting on its Kite app.
 
In July this year, customers of Zerodha faced issues in the BSE F&O (BFO) segment on the Kite platform. Many suffered losses due to glitches and are demanding that the broker make up for their losses. Zerodha blamed its internet service-providers (ISP) for the glitch.
 
In June, Zerodha experienced an outage with its ISPs due to issues with data feeds on Kite. However, the problem was later resolved.  
 
In the same month, the National Stock Exchange (NSE) and NSE Clearing Ltd (NCL) paid Rs72.64 crore to SEBI to settle the February 2021 trading halt issue. On 24 February 2021, NSE had to suspend trading for nearly four hours after a technical glitch affected the links from the telecom service-providers. The glitch occurred as rates on NSE stopped updating at 10.08am, which led to the closure of the F&O segment by 11.40am and the cash market by 11.43am. It affected the online risk management system due to which market functioning had to be halted.
 
You may also want to read…
 
 
 
 
Comments
Array
Free Helpline
Legal Credit
Feedback