NSE shutdown for almost 5 hours because of glitch in online risk management

The National Stock Exchange of India (NSE) shutdown all trading on Wednesday 24th February due to a technical glitch of unavailability of online risk management system. This halt was for almost 4 hours beginning from 11:40 AM (IST).

In a press release, NSE emphasized that the instability of links from the telecom service providers influenced the online risk management system.

NSE yesterday received communication of instability of all their links from both the telecom service providers. While there was no impact to the trading system, this instability had an impact to the online risk management system, also configured in a High Availability mode.

— NSE India (@NSEIndia) February 25, 2021

“NSE has multiple telecom links with two service providers to ensure redundancy. 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,” NSE tweeted.

As the risk management system was unavailable, market functioning could not continue normally and therefore, had to be shut down. NSE decided to reopen trading activity only after the issue had been settled. They posted an update around closing time and trading was extended until 5:00 PM.

“In view of the exceptional situation arising out of the ‘trading halt’, it was decided to extend the trading hours from 3.30 pm to 5.00 pm at the NSE, BSE and MSEI,” SEBI said.

India’s largest broker, Zerodha, had advised its clients to carry out their trading orders through BSE for time being. Upstox, ICICIdirect also followed with similar advisories on social media.

Plan of action: If NSE isn't back up by 2.45 pm, we will block all new MIS & CO orders for the day and attempt to square off all equity MIS & CO positions on BSE. Unfortunately, we will not be able to do anything with intraday F&O positions if NSE isn't back up. https://t.co/UvUjhl1dxP

— Zerodha (@zerodhaonline) February 24, 2021

The Securities and Exchange Board of India (SEBI) has asked NSE to submit a report on the shutdown at their earliest. According to sources, the is likely to submit a preliminary report by Friday 26th February.

Jimeet Modi, CEO & founder, Samco Ventures, expressed his concern by saying, “The biggest question is why was the entire market shut just because index feeds were not refreshing? Feeds for underlying contracts were fine and so was order matching, so why shut down the entire market?”