Indian regulator mandates top bourses to serve as alternative trading venues in case of glitches
India’s securities regulator is ensuring that its stock exchanges are well prepared to handle any technical glitches or outages that could impact trading. In a recent circular, the Securities and Exchange Board of India (Sebi) has directed the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to serve as alternative trading venues for each other in the event of disruptions.
Starting in April next year, the NSE and BSE will collaborate to safeguard investors from potential price risks during trading halts. The directive outlines a specific procedure for the exchanges to follow if one of them experiences any technical issues. In such cases, the affected exchange must promptly inform Sebi and the other exchange within 75 minutes. The unaffected exchange then has a timeline of 15 minutes to enact the procedure for the alternative trading venue.
To implement this directive effectively, Sebi has requested that the NSE and BSE develop a joint standard operating procedure and present it to the regulator within the next two months.
The NSE, as India’s largest stock exchange with over 1,600 listed companies, and the BSE, the country’s oldest exchange with more than 5,000 listed firms, play crucial roles in the Indian financial market. By designating them as backup trading venues for each other, Sebi aims to enhance the resilience of India’s stock trading ecosystem and protect investor interests.
