Stock Brokers Association ANMI Raises Serious Questions on NSE's Trading Halt

Moneylife Digital Team 25 February 2021

Investor Interest

The Association of National Exchanges Members of India (ANMI) has raised several serious questions on the Wednesday's trading halt at the National Stock Exchange (NSE). In a letter to market regulator Securities Exchange Board of India (SEBI), the association alleged that NSE had knowledge of the situation at the initial trading hour but it did not take any steps. Further, due to delayed communication from NSE while informing members about reopening of the market, investors suffered huge monetary losses, ANMI says.

The letter addressed to G Mahalingam, whole time member (WTM) of SEBI says, "We believe that the exchange had knowledge of situation at the initial trading hour when the position remained at peak level, however, no steps were taken by the exchange to mininise the damage to investors."

"The major online brokerage house informed around 2.45pm that they will square off intraday trades by 3.10pm. However, exchange continued to remain silent up to 3.20pm and at 3.20pm announced commencement of trading at 3.30pm. Exchange could have stepped in before 3.10pm and assured stakeholders on resumption of trading during the day. That could have averted panic sell off by online brokers on BSE and prevented huge monetary loss to investors. All this happened due to lack of clarification from NSE on trading restart timing. They only informed after all cash positions were cross settled at abnormally high discount and premiums on BSE. A simple proactive communication from all could have avoided this sell off," the letter from ANMI says.

Trading on the NSE was stalled during the intra-day session on Wednesday due to a technical glitch. Accordingly, the technical glitch impacted intra-day trading on futures and cash segments.

The glitch occurred as rates on NSE stopped updating at 10.08am, which led to closure of the F&O segment by 11.40am and Cash market by 11.43am.

"NSE has multiple telecom links with two service providers to ensure redundancy and we have received communication from both the telecom service providers that there are issues with their links due to which there is an impact on NSE system," a spokesperson from NSE had said.

Here is the letter sent by ANMI to SEBI...

Comments

User

hamungel

4 years ago

Persons of interest involved in this stoppage of trade should not only be fined but also be sent to jail.

Gopal krishnan

4 years ago

Who is responsible for these kinds of outrage. Accountability is completely lacking.
Tomorrow at 5.30 pm NSDL is giving a free webinar; no idea what for? Earlier because of them ,burnt fingers on Gold ETF. Now afraid to look at ETF word!
Thank you for your timely reports.