Domestic stock markets were open today (a Saturday), as the BSE and NSE conducted special live trading sessions to check their preparedness to handle any glitches or disruptions. The sessions were conducted as part of the Securities and Exchange Board of India’s (SEBI’s) framework for the Business Continuity Plan (BCP) and Disaster Recovery Site (DRS) of Market Infrastructure Institutions (MII).
In March 2019, the market regulator SEBI laid a framework for the stock exchanges, clearing corporations and depositories (collectively referred to MIIs) to have in place BCP and DRS to maintain data and transaction integrity.
The stock exchanges from time to time evaluate their preparedness to deal with any major disruptions, and for that, they conduct special trading sessions. They make an intraday switch over from the Primary Site (PS) to DRS.
“Trading members are requested to note that Exchange shall be conducting a special live trading session with intraday switch over from Primary Site (PR) to Disaster Recovery Site (DR) on Saturday, May 18, 2024, in equity and equity derivatives segments,” the BSE said in a circular.
Both BSE and NSE conducted similar live trading sessions on March 2, 2024.
What are the timings for the special trade sessions?
In the capital market segment, the stock exchanges conducted special trading sessions in two parts.
With regards to live trading from the PS, the pre-open session was conducted from 9:00 am to 9:08 am. The normal market timings was 9:15 am to 10 am
With respect to live trading from the DR site, the pre-open session was conducted from 11:15 am to 11:23 am. Normal market timings were 11:30 am to 12:30 pm.
In the Futures & Options segment, the normal market timings on the PS were from 9:15 am to 10 am. The normal market timings from the DR site were from 11:30 am to 12:30 pm, as per a NSE circular.
What are the price bands applicable for special trading sessions?
For the special live trading session, all securities (including those on which derivative products are available) had a maximum price band of 5 per cent, the NSE said.
Securities already at 2% or a lower price band, continued to be available in the respective bands. Price bands of 5 per cent were applicable on all close ended mutual funds, and all futures contracts had a daily operating range of 5 per cent.
What is a disaster recovery site?
A disaster recovery site (DRS) is a place where a stock exchange, in case of any disruptions, can temporarily relocate its operations. Shifting to DRS ensures continuity of trading operations, and also to help in maintaining data and transaction integrity.
As per the SEBI’s framework, the DRS should preferably be set up in different seismic zones and in case due to certain reasons such as operational constraints, change of seismic zones, etc., a minimum distance of 500 kilometer shall be ensured between Primary Data Centre (PDC) and DRS, so that both DRS and PDC are not affected by the same disaster.
