Standard Operating Procedure for handling of Stock Exchange Outage and extension of trading hours thereof
Summary
This circular establishes a Standard Operating Procedure for handling stock exchange outages and the subsequent extension of trading hours. It mandates immediate reporting requirements for affected exchanges to stakeholders and SEBI upon the occurrence of an outage. The document details specific timelines for resuming trading, extending market hours, and updating Business Continuity Plans.
Text
Stock Exchange Outage shall mean stoppage of continuous trading, either suo moto by exchange or by virtue of reasons beyond control of stock exchange. Further, stoppage of continuous trading shall not include trading halt on account of index based market-wide circuit breaker.
The stock exchange that suffered the outage (referred to as affected stock exchange) shall intimate about the outage to various stakeholders as mentioned below: 1. Market Participants / Trading Members / Other MIIs - Immediate but not later than 15 minutes from occurrence of outage. Through broadcast message and by publishing on its website. 2. SEBI - Immediate after occurrence of outage. Through an email to dedicated email id : techglitch@sebi.gov.in
Further, the affected stock exchange shall update about the ongoing outage in the time intervals of 45 minutes from the initial intimation, as mentioned at Para 5 above, until normalcy to operations is restored. Extension of trading hours, if applicable (as mentioned subsequently from para 10 to 16 of the circular), shall be mentioned in the intimation by the affected stock exchange.
In the event of disruption of trading in one or more market segments of affected stock exchange, qualifying as outage, trading in other unaffected segments of the affected exchange shall continue and all other unaffected exchanges shall continue to trade in all of their market segments.
Affected stock exchange would restore operations to normalcy at the earliest including from the Disaster Recovery Site and carry out various activities, in terms of SEBI Circular dated March 22, 2021 on Business Continuity Planning (BCP) and Disaster Recovery (DR) and SEBI circular dated July 05, 2021 on Standard Operating Procedure for handling of technical glitches by Market Infrastructure Institutions (MIIs) and payment of “Financial Disincentives” thereof, as applicable.
A pre-opening session similar to normal pre-opening session would be conducted for effective price discovery, before resumption of trading. Further, there shall be an advance intimation of at least 15 minutes to various market participants with regard to resumption of trading or start of pre-opening session, as applicable.
If the trading on the affected stock exchange resumes to normalcy at least one hour (excluding 15 minutes of pre-opening session, if applicable) before the normal scheduled market closure, trading hours on that day for all stock exchanges would remain unchanged.
If the trading on the affected stock exchange does not resume to normalcy even one hour (excluding 15 minutes of pre-opening session, if applicable) before the scheduled market closure, trading hours for all stock exchanges would automatically get extended for additional one and half hours for that day and the same would be intimated by the affected stock exchange to market participants, other MIIs and SEBI latest by one hour fifteen minutes before the normal scheduled market closure. Subsequent to the communication from the affected stock exchange, the unaffected stock exchanges would also suitably issue a notice with regard to extension of trading hours on their stock exchanges.
If the trading on the affected stock exchange does not resume to normalcy even 45 minutes (excluding 15 minutes of pre-opening session, if applicable) post normal scheduled market closure, in the case of extension of trading hours, no further trading would be allowed on the affected stock exchange for that day and other stock exchanges would continue to operate till the extended time provided at para 11 above to enable smooth closure/settlement of intraday positions. The affected exchange would have to suitably intimate the same to market participants, other MIIs and SEBI latest by 45 minutes post normal scheduled market closure.
If the occurrence of outage as mentioned in para 4 above, happens during the last trading hour of normal operation and latest before 15 minutes of normal scheduled market closure, trading hours for all stock exchanges would automatically get extended by one and half hours for that day and the same would be intimated by the affected stock exchange to market participants, other MIIs and SEBI immediately but not later than 10 minutes from the occurrence of outage. Subsequent to the communication from the affected stock exchange, the unaffected stock exchanges would also suitably issue a notice with regard to extension of trading hours on their stock exchanges.
Exchanges to put in place a common close out policy, within 30 days of this circular, to ensure uniform methodology of settlement of open positions, in case continuous trading didn’t happen in Cash Market or Equity Derivative Segment of the exchange during last half an hour of trading for the day due to outage.
Extension of trading hours, if any, for Cash Market would result in equivalent extension of trading hours in Equity Derivative Segment and vice versa, provided trading hours at the start of the day are aligned for both Cash Market and Equity Derivative Segment. Further, Extension of trading hours in the Cash Market would also result in equivalent extension to other secondary market mechanisms conducted during trading hours such as Offer For Sale, Buy back etc.
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Source: SecMarx — Standard Operating Procedure for handling of Stock Exchange Outage and extension of trading hours thereof. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.