Clipped from: https://www.thehindubusinessline.com/opinion/editorial/outrage-over-outage/article33934356.ece?homepage=true
The investigation into the cause behind the outage should be expedited and stern action taken
The long trading halt on the National Stock Exchange (NSE) on Wednesday points towards serious shortcomings on the part of the exchange in managing its technological infrastructure. While the market regulator has asked the exchange to carry out a detailed root-cause analysis of the halt and to explain why trade was not migrated to the disaster recovery (DR) site at the earliest, the investigation should be followed by stern action that will act as a deterrent to future lapses of this kind. The NSE, which accounts for 100 per cent of equity derivative trades and almost 90 per cent of cash trades in equity, halted trading around 11.40 am on Wednesday citing issues with telecom links as the reason. It has also stated that there was no impact on the trading system but the instability in telecom links impacted the online risk management system, due to which trading could not continue. With the trading halt extending till 3.30 pm, trading hours had to be extended until 5 pm on the BSE, NSE and MSEI.
The Securities and Exchange Board of India should expedite the investigation and take stern action if the exchange is found wanting in any aspect. The exchange also needs to be pulled up for not communicating clearly to investors about restarting trading. SEBI should soon frame rules for compensating investors in such events. Finally, another round of stress test is called for on all exchange platforms to see if they are equipped to handle the heavy load around the derivative expiry period.
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