Why did stock exchanges conduct special trading sessions today?

Domestic stock exchanges the Bombay Stock Exchanges (BSE) and the National Stock Exchanges (NSE) conducted special live trading sessions on Saturday (March 2) as part of the SEBI’s framework for business continuity plan (BCP) and disaster recovery site (DRS).

The special sessions were aimed at checking the preparedness of stock exchanges to handle any glitches or disruptions at the exchanges.

Typically, BSE and NSE are shut on Saturdays and Sundays, and open on weekdays from Monday to Friday.

Why did stock exchanges conduct special trading sessions?

The BSE and the NSE Stock exchanges said that they initiated the transition of trading systems from the primary site (PR) location to the disaster recovery (DR) location.

“Members are requested to note that the Exchange is conducting a special live trading session with intraday switch over from Primary site to Disaster Recovery site on Saturday, March 2, 2024, in equity and equity derivatives segments,” NSE had said in a circular earlier.

The session was conducted based on specific discussions with SEBI and their Technical Advisory Committee.

SEBI has laid out a framework for BCP and DRS for market infrastructure institutions (MIIs) — stock exchanges, depositories, and clearing corporations. The framework aims to ensure that in case of any outage, trading activities continue to take place without any disruptions. Besides, it also helps in maintaining data integrity.

What were the timings for the special trading sessions?

The stock exchanges conducted special sessions in two phases. For the capital market segment, on the primary site, the pre-open session was conducted from 9:00 am to 9:08 am on the primary site, and the normal market session was conducted from 9:15 am to 10:00 am, according to the NSE circular.

The pre-open session on the disaster site was conducted from 11:15 am to 11:23 am, and the normal trading session opened at 11:30 am and closed at 12:30 pm, the circular said.

The outstanding orders at the primary site were purged before the start of trading from the disaster recovery site, according to a BSE circular.

What were the price bands applicable for special trading sessions?

All securities (including those on which derivative products are available) had a maximum price band of 5 per cent for the special live trading session on March 2, the NSE said.

Securities already in the 2 per cent or lower price band, continued to be available in the respective bands, it said.

For all close-ended mutual funds, a price band of 5 per cent was applicable. 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 helps in maintaining data and transaction integrity.

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