The SEBI released a new circular on November 28, 2024, to ensure business as usual even at times when stock exchanges are not working. The business continuity arrangements based on this circular would apply across resource-pooling segments i.e. the Cash Market, Equity Derivatives, and Currency Derivatives.
The phased approach that SEBI would initiate in this area involves the following. In phase one, the Software-as-a-Service model would improve risk management in Clearing Corporations as a risk management measure. The second phase of the intervention talks about the outages of trading venues during market hours and how that would not affect traders with open positions from falling into price risks.
One of the important measures introduced is interoperability between the stock exchanges. This means that if any technical difficulties are encountered by a trading venue, then relevant products at another exchange may be hedged by traders having a position in that venue. Additional provisions have been specified for those exclusive scrips and index derivatives, which do not have correlated products at the other exchanges.
SEBI has designated both the NSE and BSE as back-to-back venues for each other in case of outages. Both exchanges will have to devise a Standard Operating Procedure (SOP) to cater to such contingencies within 60 days of submission to SEBI.
The rules will take effect from April 1, 2025, giving the stock exchanges, and clearing corporations, time to put the changes in place and adopt proper implementations.
Tomorrow 29th Nov is celebrated as National Square Dancing Day!
As stated in Bhagavad Gita :
मा सूचः।
Fear not, for you are not the body; you are the eternal soul.
Photo by Byju v.