The Securities and Exchange Board of India said in a circular issued on Thursday that the National Stock Exchange and the BSE will act as alternative trading venues for each other in case either of them suffers from any technical glitch or outage.
This exchange interoperability is aimed at ensuring business continuity during an outage and applies to cash, derivatives, currency derivatives and interest rate derivatives. This rule will go into effect on April 1, 2025.
“After discussions with the exchanges, it has been decided that the NSE will initially act as an alternative trading venue for the BSE and vice versa,” SEBI said.
According to a circular issued by SEBI, both exchanges are required to develop standard operating procedures with details to be followed in the event of a failure of either of the two major exchanges.
The SOP also includes changes required to brokerage and clearing house systems to implement interoperability. Measures for end investors described in the circular.
The SOP has to be submitted to SEBI within 60 days of issuance of the circular.
According to the regulator, exchanges experiencing an outage will have to manage the outage as per existing rules and notify the alternative exchange and SEBI within 75 minutes. It added that within 15 minutes of the warning being issued, alternative trading venues will initiate business continuity plans in accordance with the SOPs.
