Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems
Summary
This circular establishes a regulatory framework for stock brokers to address technical glitches in their electronic trading systems. It mandates specific reporting timelines, capacity planning standards, and software testing protocols to mitigate technology-related risks. Additionally, it requires the implementation of monitoring mechanisms, business continuity plans, and disaster recovery sites for specified entities. This section mandates specific operational requirements for disaster recovery drills, team constitution, and infrastructure synchronization between primary and secondary sites. It establishes the authority of stock exchanges to define critical terms, set financial disincentives for technical glitches, and enforce compliance through audits and ISO certifications. The document concludes with the legal basis, effective date, and an annexure detailing the Root Cause Analysis form for reporting technical incidents.
Text
Technical glitch shall mean any malfunction in the systems of stock broker including malfunction in its hardware, software, networks, processes or any products or services provided by the stock broker in the electronic form... which may lead to either stoppage, slowing down or variance in the normal functions / operations / services of systems of the stock broker for a contiguous period of five minutes or more.
Stock brokers shall inform about the technical glitch to the stock exchanges immediately but not later than 1 hour from the time of occurrence of the glitch.
Stock brokers shall submit a Preliminary Incident Report to the Exchange within T+1 day of the incident (T being the date of the incident). The report shall include the date and time of the incident, the details of the incident, effect of the incident and the immediate action taken to rectify the problem.
Stock brokers shall submit a Root Cause Analysis (RCA) Report (as per Annexure I) of the technical glitch to stock exchange, within 14 days from the date of the incident.
RCA report submitted by the stock brokers shall, inter-alia, include time of incident, cause of the technical glitch (including root cause from vendor(s), if applicable), duration, chronology of events, impact analysis and details of corrective/ preventive measures taken (or to be taken), restoration of operations etc.
Stock brokers shall submit information stated in para 3.1, 3.2 and 3.3 above, by e-mail at infotechglitch@nse.co.in, a common email address for reporting across all stock exchanges.
All technical glitches reported by stock brokers as well as independently monitored by stock exchanges, shall be examined collectively by the stock exchanges along with the report/RCA and appropriate action shall be taken.
Stock brokers shall do capacity planning for entire trading infrastructure i.e. server capacities, network availability, and the serving capacity of trading applications.
The installed capacity shall be at least 1.5 times (1.5x) of the observed peak load. The Peak load shall be determined on the basis of highest peak load observed by the stock broker during a calendar quarter.
Stock brokers shall deploy adequate monitoring mechanisms within their networks and systems to get timely alerts on current utilization of capacity going beyond permissible limit of 70% of its installed capacity.
To ensure the continuity of services at the primary data center, stock brokers as may be specified from time to time by stock exchange (hereafter referred to as specified stock brokers) shall strive to achieve full redundancy in their IT systems that are related to trading applications and trading related services.
Stock exchanges shall issue detailed guidelines with regard to frequency of capacity planning to review available capacity, peak load, and new capacity required to tackle future load on the system.
You have read the preview. Create a free account to read the full document and see every order that applied it.
Free accounts include 10 searches/day with full text access.
Source: SecMarx — Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.