What Are the New NSE Guidelines to Overhaul the Technical Glitch Framework for Stock Brokers?
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Synopsis
The National Stock Exchange has taken a significant step by releasing new guidelines defining technical glitches and addressing capacity planning and software testing. This move follows a SEBI proposal aimed at enhancing the technical glitch framework for stock brokers, seeking stakeholder feedback and aiming for improved operational efficiency.
Key Takeaways
- NSE has released new guidelines for technical glitches.
- Immediate reporting of glitches is required.
- Preliminary incident reports must be submitted within one business day.
- Financial disincentives apply to glitches lasting over 15 minutes.
- Exemptions are available under specific conditions.
Mumbai, Sep 27 (NationPress) The National Stock Exchange (NSE) has introduced new guidelines addressing the concept of a technical glitch, along with directives on capacity planning, software testing, and change management. This initiative follows a proposal by SEBI aimed at overhauling the technical glitch framework for stock brokers.
The latest directives from the stock exchange also clarify the definition of business continuity planning, disaster-recovery sites, and the establishment of a monitoring mechanism to effectively implement the SEBI proposal.
According to the NSE guidelines, the financial disincentive structure will apply to technical glitches persisting for over 15 minutes. However, this disincentive may be waived if the glitch occurs in either the mobile or web-based trading application, provided the other platform is functioning correctly.
The NSE is seeking feedback from all stakeholders regarding these guidelines.
Brokers are mandated to report any technical glitches to the exchange immediately, and no later than one hour after the incident occurs, as stated in the release.
A preliminary incident report must be submitted within one business day, detailing the date and time of the incident, its nature, impact, and immediate corrective actions taken.
A Root Cause Analysis (RCA) Report is required within 14 days, and any incidents lasting longer than 45 minutes must be audited by an independent reviewer appointed by the broker.
On September 22, SEBI published a draft circular suggesting that certain disruptions be excluded from the technical glitches definition. Brokers will no longer need to report failures related to market infrastructure institutions (MIIs) or delays in KYC processing as reportable technical glitches.
Moreover, back-office issues not impacting trading, payment gateway failures at banks or aggregators, and issues with decision-support tools such as charts or reports will also not be classified as technical glitches.
Point of View
I believe that the NSE's proactive approach to revising the technical glitch guidelines is a step in the right direction. This initiative not only enhances the integrity of our financial markets but also fosters trust among investors and stakeholders. By addressing these issues head-on, the NSE demonstrates its commitment to maintaining a robust trading environment that prioritizes transparency and efficiency.
NationPress
27/09/2025
Frequently Asked Questions
What is the new definition of a technical glitch?
The NSE's new guidelines outline a technical glitch as any disruption that affects trading operations, with specific criteria for reporting and accountability.
What is the reporting timeline for brokers regarding technical glitches?
Brokers are required to report any technical glitches to the exchange immediately and within one hour of occurrence.
Are there penalties for technical glitches?
Yes, a financial disincentive structure applies for technical glitches lasting more than 15 minutes, unless certain exemptions are met.
What should brokers include in their preliminary incident report?
The report must include the date and time of the incident, details of the glitch, its impact, and immediate actions taken.
What is the deadline for submitting a Root Cause Analysis Report?
The RCA Report is required to be submitted within 14 days of the incident.
