Technical glitch halts trading at NSE ahead of IPO

Exchange rules out cyberattack; finance ministry seeks report from Sebi

A technical glitch at the National Stock Exchange (NSE), the country’s biggest stock exchange, held up trade for three hours on Monday in the cash and derivatives segments. 

The problem occurred at the beginning of the session when several brokers complained stock and index quotes were not being updated. The NSE immediately suspended trading in the cash segment. 

Trading was normal in the futures and options (F&O) segment but the NSE halted operations at 9:55 am. After the two failed attempts at 10:45 am and 11:15 am, trading resumed at 12:30 pm. “The NSE cash market segment did not function normally due to a technical problem at the opening today (Monday) and accordingly was closed. Two attempts to reopen the market were not successful and finally on the third attempt the market was opened at 12.30 pm in the cash and F&O segments. The NSE deeply apologises for the glitch,” the exchange stated.

Trading was normal on the BSE, with the exchange witnessing nearly three times its average traded volume in the cash segment.  

The turnover on the NSE on Monday was Rs 6,256 crore against the previous five-day average of Rs 22,760 crore. The turnover on the BSE was Rs 9,905 crore against its previous five-day average of Rs 3,474 crore. 

The F&O volume on the NSE was Rs 3.3 lakh crore, against the previous five-day average of Rs 4.8 lakh crore. The BSE did not see any meaningful rise in its F&O volume.

“Trading volumes, particularly derivatives, got affected. Cash traders moved to the BSE but derivatives traders couldn’t as volumes trade happen on the NSE,” said Deven Choksey, managing director, KR Choksey Investment Managers.

The finance ministry has sought a report from the Securities and Exchange Board of India (Sebi). “The NSE stopped trading this morning, reportedly, due to a technical glitch. Sebi is in touch with the NSE and is closely monitoring the situation,” Sebi stated. NSE clarified the halt was not because of a cyberattack. A finance ministry official also ruled out hacking. 

“Many F&O traders were not able to execute their trading strategies. Several traders are not even registered with the BSE as virtually all derivative trades take place on the NSE,” said an executive with a foreign brokerage.

Some brokers barred clients from taking intra-day orders on the NSE and advised them to check price feeds before placing orders.NSE said all trades executed in cash and the F&O segments ahead of the trading halt would remain valid.The exchange said it didn’t move trading to its back-up site, which was normally done during a “disaster, hardware failure or connectivity related issues” as “preliminary assessment indicated a software problem” which was “expected to be rectified quickly”. On Monday, the Indonesian stock exchange suspended trading over issues with its information distribution system. Earlier this month, a bug led to all technology stocks quoting at $123 on the Nasdaq. In June 2014, the BSE had to halt trading for three hours due to problem in its servers.”

The matter is being examined by the internal technical team and external vendors. It has been referred to the standing committee on technology, comprising public interest directors and technology experts, for review and to approve measures to prevent recurrence,” the NSE spokesperson said. 

The NSE is in the process of launching its Rs 10,000-crore IPO. The exchange is also dealing with a Sebi investigation into unfair access for certain brokers. The NSE has been without a full-time head since December 2016. MD and CEO-designate Vikram Limaye is expected to take charge later this month.