Technical issues at depositories delays settlement of stock trades

Brokerages face continued trade settlement issues even as NSDL says systems are back to normal, leaving some investors unable to sell stocks

Some Indian stock brokerages continued to face challenges in settling trades on Friday ‍even after National Securities ​Depository Ltd (NSDL) - India's largest depository - said its services had returned to normal functioning, according to sources at three large brokerages.

A network-related issue led to a temporary delay in services and after moving operations to a disaster recovery site, "operations are functioning normally", NSDL said ​in a post on X. The depository referred Reuters to the post when asked for comment.

Since Tuesday, brokerages have intermittently faced technical issues where stocks bought by clients did not reflect in their portfolios due to settlement issues, two of the three sources said, declining to be identified as they are not authorised to speak to the media.

This has meant some customers could not sell the stocks or exit their positions, they said, adding that the issue has persisted through Friday.

Reuters could not determine how widespread the problem was.

"Due to a technical issue at the depository, shares ‌bought on Wednesday have not yet ​been settled across all brokers," one of India's largest brokerage firms, Zerodha, said in a statement on its website earlier in the day.

Markets regulator Securities and Exchange Board of India (SEBI) did not ‍immediately respond to a Reuters' request for comment.

"There has been (a) lot of chaos at brokerage firms," one of the ‍three sources ‌said. Because of ​delays in receiving trading related files ‍from the depository, the brokerage and its clients have struggled with ‍reconciling ‍trades, he added.

(Reporting ‌by Vivek Kumar M and Hritam Mukherjee in Bengaluru; Editing by Ronojoy Mazumdar)