Upstox (also known as RSKV Securities India Pvt Ltd), India's second largest brokerage platform, faced a massive technical glitch yesterday leading to several investors suffering serious losses after they were unable to square up positions. Even today, investors suffered losses after Upstox enforced compulsory squaring off, say investors who have emailed Moneylife. Upstox has been most reticent with information and until nine hours ago, its Twitter handle was denying any issues. After our persistent follow up since afternoon, Upstox has sent us a statement admitting that it has been facing technical glitch since 1st February due to hardware failure and had blocked intraday trading at 12pm Tuesday requesting users to square off their positions at 2pm.
Upstox’s technical glitches came two days in a row and this led to several angry users taking to Twitter to express outrage against repeated issues with the trading platform. On Monday, Upstox was going through technical issues leaving investors-traders high and dry on Budget day when market indices soared. Tuesday’s problem happened even as Indian stock markets continued their bull run during the mid-noon session and the 30-share Sensex reclaimed the 50,000 mark in the initial hour of the rally. While a technical problem can happen to any company, what is worrying about this situation is the lack of information to investors and the silence of the first-line regulators as well as the market regulator.
Responding to Moneylife in an email, Shrini Viswanath, co-founder and chief technology officer of Upstox, says, “On 1st February, we identified some issues that our customers had been facing but our systems are working fine now and our customers are able to use our platform as usual. The issues were due to a hardware failure, where one of our primary order management servers – an exchanged approved OMS vendor - aborted. To ensure the systems were fully functional today and customers do not suffer any further, as a precautionary measure we had to block intraday trading at 12pm requesting users to square off their positions at 2pm. There were no order placement issues today.”
Trader-investors, who are using Upstox, have been facing login issues since the past two days. Irate users of the Upstox app took to Twitter and other social media apps to vent their ire on the company for not being able to access the platform.
Interestingly, while such a large brokerage firm was suffering a severe outage, the stock exchanges and the regulator have maintained a complete silence, instead of asking questions or initiating any action to prevent investors suffering further.
Here are some tweets:
Sunil Hudda who shared his experience of a forced loss incurred due to the downtime for two consecutive days.
Naren posted a screenshot of an error message saying “The operation could not be completed. UpstoxPro.NKError error 1.)
@NocturnalRam wrote about the login issues he faced due to the technical fault and the huge losses he incurred.
“What was worse was that the company did not bother to issue any statement about the glitch and as usual the market regulator is keeping mum on the issue,” said one investor. Asit Baran wrote about how the company was turning a blind eye and refusing to even acknowledge.
This is not the first time Upstox's clients have faced technical issues while logging in. The company has a history of glitches and its customers keep on complaining about the problems faced by them.
Sandeep wrote about the how predictable the situation was getting. “Brace yourself. Inconvenience regretted messages are on their way.”
@kandlechart pointed out how it is criminal to bring such huge losses to so many traders.
Many wrote on Twitter that they have already registered their complaints on the SCORES portal of SEBI.
Some pointed out how the company was aware that their servers were down and clients unable to execute orders but still the company was asking the clients to raise a ticket or for account details to be sent on direct message.
The tweets show that it was a major issue and lakhs of customers were affected by it.
Customer service from Upstox has been slow to respond to client issues.
There are technical glitches for two days in a row this time.
Many trader-investors are calling for regulatory action against the brokerage.
Pankaj G wrote to Moneylife about how he lost Rs15 lakh (his life savings) in a single day due to technical issue with the Upstox server.
On 1st February, he shorted the bank Nifty call option and the moment he realised that he is getting into loss he tried squaring off the positions, but Upstox did not let him square off his position due to their technical error. Both the site was as well as the mobile app were down.
He contacted Upstox customer care and, after a struggle of an hour, he was able to get connected to their representatives. To his surprise, the executive knew the problem but even then, he was not able to help squaring off the position. But Pankaj was in for a bigger shock today in the morning, when he saw his intraday order was converted into delivery order and loss didn't stop at yesterday's market close but continued after the market opened today as well.
Meanwhile, in a separate issue, Upstox sent a revised margin announcement at 9.40am today and traders were again suddenly caught unawares.
Markets open at 9am and retail trading commences at 9.15am. Upstox, however, sent a revised margin update at 9.40am by which time many people using the platform would have entered into trades or have been wondering why their orders are getting rejected.
The silence from regulators is deafening.
Mr Vishwanath from Upstox, however, claims that it was not a regular issue but a one-time incident. He says, “While every technology-backed company at some point is faced with a systems issue, one thing we ensure is providing a good up-time consistently. That said, we are improving every day and working very hard towards providing the secure and unique user experience that has led to our growth.”
“We have been working non-stop from the minute that we identified the matter yesterday to ensure this doesn't occur, and it is now resolved. This is not a regular issue but a onetime issue,” he added.