SEBI unveils SOPs for the handling of Stock Exchange Outage & extension of trading hours
- Blog|News|Company Law|
- 3 Min Read
- By Taxmann
- |
- Last Updated on 11 January, 2023
Circular No. SEBI/HO/MRD-TPD-1/CIR/P/2023/7, Dated 09.01.2023
SEBI recently discussed with Market Infrastructure Institutions (MIIs) about outages at stock exchange(s) to be handled in a harmonized and consistent manner and the Standard Operating Procedure with regard to the handling of such stock exchange outages in the Cash Market and Equity Derivatives segment was issued.
What is a Stock Exchange outage?
Stock Exchange Outage means stoppage of continuous trading, either suo-moto by exchange or by virtue of reasons beyond the control of the stock exchange. Further, stoppage of continuous trading shall not include a trading halt on account of the index-based market-wide circuit breaker.
Timeline for the necessary communications
Communication of such outages by exchanges to be made within 15 mins to all market participants. Whereas, SEBI must be informed as soon as an outage occurs. The affected stock exchange shall update about the ongoing outage in time intervals of 45 minutes from the initial intimation.
No extension where the stock exchange resumes normalcy within an hour after the outage
Trading hours on that day for all stock exchanges would remain unaltered if normal trading on the affected stock exchange restarts at least an hour (excluding the 15 minutes of the pre-opening session, if applicable) before the regularly scheduled market close.
One and half hour extension where the stock exchange doesn’t resume normalcy even one hour before the scheduled closure
Trading hours for all stock exchanges will automatically be extended by an additional one and a half hours for that day if trading on the affected stock exchange does not resume to normalcy even one hour (excluding 15 minutes of the pre-opening session, if applicable) before the scheduled market closure.
No extension where the stock exchange doesn’t resume to normalcy even 45 minutes before the scheduled closure
Where, Trading on the affected stock exchange does not resume to normalcy even 45 minutes (excluding 15 minutes of the pre-opening session, if applicable) post normal scheduled market closure, in the case of an extension of trading hours, no further trading would be allowed on the affected stock exchange for that day and other stock exchanges would continue to operate till the extended time provided above, to enable smooth closure/settlement of intraday positions.
One and half hour extension where stock exchange doesn’t resume to normalcy even 15 minutes before scheduled closure
If the occurrence of an outage, happens during the last trading hour of normal operation and the latest before 15 minutes of normally scheduled market closure, trading hours for all stock exchanges would automatically get extended by one and a half hours for that day.
Extension of trading hours in the Equity Derivative Segment
Extension of trading hours for Cash Market would result in an equivalent extension of trading hours in Equity Derivative Segment and vice versa, provided trading hours at the start of the day are aligned for both Cash Market and Equity Derivative Segment.
The affected stock exchange would restore operations to normalcy at the earliest including from the Disaster Recovery Site and carry out various activities. Also, a pre-opening session similar to a normal pre-opening session would be conducted for effective price discovery, before a resumption of trading. The board also prescribed a number of other items.
Click Here To Read The Full Circular
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied