Country's largest bourse NSE today halted trading for over three hours due to technical glitches, leaving investors with no real-time updates and prompting the authorities to seek a detailed report even as the bourse ruled out the possibility of a cyber attack.
Concerned over the trading disruption at the country's largest exchange, Sebi held a meeting with senior officials of the NSE and asked them to submit a detailed report on the matter.
Sources said the finance ministry has received an initial report on the technical issue in the evening. The IPO-bound exchange -- which issued three statements on the matter today -- 'deeply apologised' for the glitch even as trading went off smoothly at rival BSE where volumes surged.
Investors faced problems since morning in executing trade and the exchange stopped trading in cash as well as Futures and Options (F&O) segment. The technical glitch in its trading system also comes at a time when the NSE is awaiting approval from the markets regulator Sebi for its Rs 10,000 crore IPO.
Besides, the watchdog is probing the issue that the bourse had allegedly provided preferential access to some brokers. Late in the evening, Sebi issued its second statement on the matter and said a detailed report has been sought from the bourse.
Despite the disruptions, the bourse has said that all executed trades in cash and F&O segments remain valid. "On preliminary analysis, the technical problem apparently is related to software. It does not seem to be related to any cyber security related compromise," the exchange told Sebi during the meeting.
The regulator has also asked the exchange to carry out a review of their 'Business Continuity Plans' as well as submit a detailed plan on the measures that are going to be taken to avoid such recurrences.
"Sebi is also looking at the matter comprehensively and will interact with different stakeholders to explore as to what more needs to be done to avoid such recurrences," the statement noted.
In the afternoon, Sebi, in a statement, said it was closely monitoring the situation. There have been instances earlier also when the NSE and the BSE have faced trading problems.
In a statement issued at around 1530 hours, the exchange said cash market segment did not function normally due to a technical problem at the opening today and was closed. "F&O and CDS (Currency Derivatives Segment) market segments opened normally. Subsequently after giving notice to
the market, the F&O segment was also closed," it said.
Notwithstanding the chaos, the benchmark 50-share Nifty settled above the 9,700-mark for the first time. After at least two attempts to set things right, the National Stock Exchange (NSE) resumed operations at 1230 hours but brokers and traders had complained of difficulties in getting updates which continued till around 1400 hours.
During the day, the NSE issued as many as three public statements about the technical snag, with the last one coming at around 1930 hours. The previous two statements came at 1030 hours and 1530 hours, respectively.
Epic Research CEO Mustafa Nadeem said the problem actually got worse when there was no clear statement or guidance from the NSE about the glitch and the clarification came late at around 1000 hours. Amid concerns raised in certain quarters on why trading activities were not shifted to the back-up system, the NSE said that shifting would have taken longer.
"BCP (Business Continuity Plan) mechanism is normally invoked during any disaster, hardware failure, connectivity related issues... the system was expected to be rectified quickly and shifting BCP site would have taken longer time," the bourse said in a statement.
Noting that the preliminary assessment indicated a software problem, the exchange ruled out the possibility of cyber attack causing the technical glitch. NSE's chief of business development Ravi Varanasi told PTI that normal market operations resumed at 1230 hours and since then the system has been functioning fine.
"We are carrying out an internal review of the technical glitch," he said.
Following the technical glitch, Sebi, in the afternoon, said it was closely monitoring the situation while the finance ministry has sought a report on the matter. "NSE deeply apologises for the glitch. The matter is being examined by the internal technical team and external vendors, to analyse and identify the cause which led to the issue and to suggest solutions to prevent recurrence," it said in the statement.
Besides, the NSE has referred the matter to the Standing Committee on Technology to review the problem and approve measures to prevent recurrence of such glitches. Earlier in the day, sources at the finance ministry said this sort of problem faced by the NSE is a serious concern and hoped that such situations do not happen again.
The NSE has been the largest stock exchange in India in terms of total and average daily turnover for shares every year since 1995, as per Sebi data.(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)