A joint Standard Operating Procedure (SOP) will be prepared by both exchanges to outline steps to be taken during outages, including the role of each exchange, activity flow, and any necessary system changes.
“Upon discussion with exchanges, it has been decided that to begin with, NSE would act as an alternative trading venue for BSE and vice-a-versa. Both exchanges would prepare a joint SOP that would include plan to be invoked at the time of outage on one exchange along with flow of activity involving the affected exchange and its alternative trading venue and roles/responsibility of each of them,” said a SEBI circular issued on Thursday.
SEBI has mandated that the SOP be submitted within 60 days from the issuance of the circular.
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This initiative aims to address potential risks to investors with open positions during outages, such as price fluctuations due to material news. Leveraging the interoperability among clearing corporations, the framework will enable investors to hedge or net off their positions on an alternative exchange.
Additionally, SEBI has outlined specific steps for scrips exclusively listed on one exchange or products that do not have correlated counterparts on other platforms. Exchanges have been instructed to create reserve contracts or introduce correlated index derivatives to ensure hedging avenues remain available.
The provisions will come into effect on 1 April 2025, allowing exchanges and clearing corporations to establish the required infrastructure and implement the necessary by-law amendments.
