Review of Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems’
Summary
This circular modifies the framework for addressing technical glitches in stock brokers' electronic trading systems based on stakeholder feedback. It introduces streamlined eligibility criteria, exemptions for minor or external issues, and simplified reporting requirements to ease compliance. The revised rules define technical glitches, mandate specific reporting timelines, and rationalize capacity planning and financial disincentives.
Text
The extant technical glitch framework is modified based on principles of ease of compliance, exemptions from applicability, simplifying reporting, rationalized technology requirements, and rationalization in disincentive structure.
Technical glitch means any malfunction in the electronic system of stock broker directly or indirectly related to trading and risk management, occurring during trading session, leading to stoppage, slowing down or variance for a contiguous period of five minutes or more.
Technical issues due to global cloud provider disruptions, MII issues, new account processing (KYC), back-office issues not impacting trading/settlement, payment gateway failures at banks/aggregators, and decision support tools are not considered technical glitches.
Financial disincentive structure shall not be applicable for glitches affecting only one trading mode while the other functions properly, or for minor glitches with negligible impact on seamless operations.
The framework applies to stock brokers providing IBT/STWT trading platforms and having more than 10,000 registered clients (excluding closed accounts) as on 31st March of the previous financial year.
Stock brokers shall inform stock exchanges and their clients regarding the technical glitch within 2 hours from the time of occurrence.
Stock brokers shall submit a Preliminary Incident Report to the stock exchange within T+1 day of the incident, or the next trading day if T+1 falls on a holiday.
Stock brokers shall submit a Root Cause Analysis Report (RCA) to the stock exchange within 14 working days from the date of the incident.
All reports and information mentioned above shall be submitted on ‘Samuhik Prativedan Manch’, i.e., common portal for submissions by stock brokers.
Stock brokers shall do capacity planning for entire trading infrastructure including server capacities, network availability, and serving capacity of trading applications.
Stock brokers must ensure that all software changes are rigorously tested before being used in production systems to prevent technical glitches.
Stock exchanges shall continue to monitor the trading systems of stock brokers through the API based Logging and Monitoring Mechanism (LAMA).
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Source: SecMarx — Review of 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.