NSE hit by massive tech glitch, markets shut till further notice

The National Stock Exchange (NSE) was hit by another technical snag during the first half of the trading session on Wednesday.

According to stock brokers and dealers, the problem started with rates of Bank Nifty index were not updating and later spread to the Nifty index as well. They pointed out that the issue with Bank Nifty feeds started between 10 AM and 10.20 AM. Around 11.40 AM, the NSE said it was suspending trading across futures and options segment.

In the next few minutes, the NSE said it was suspending trading for the day until further notice.

NSE shut trading for entire markets till further notice.

Both Nifty and Bank Nifty are the largest traded derivative contracts of the NSE and the glitch caused market disruption just a day ahead of the February month futures and options expiry leading to much heartburn among traders.

Option writers benefit the most if markets are shut for trading as those who have bought or sold options loose out on time value, brokers said.

Bank Nifty index had gained 22 percent between February 1 and February 16 and fell by around 8 percent in the next few days. However, just two days ahead of the monthly derivative expiry, the index had started to move up again. On Wednesday, the index was up nearly 2 percent before it was hit by a tech glitch.

Before Wednesday, the NSE was hit by a massive tech glitch in December 2020.

Read more: NSE Clearing suffered a tech glitch before Nifty fell by 3%

NSE Clearing, the trade clearing and settlement arm of the NSE, was hit by a ‘technical glitch’ on December 21 that affected several stock brokers. Before the Nifty index witnessed its worst single day fall in nearly seven months by over 3 percent or 432 points, many brokers saw their trade orders being automatically deleted and some even had their terminals disabled.

In September 2020, the NSE Clearing arm suffered a tech glitch after SEBI introduced new margin norms. Also, pay-in and pay-out was disrupted for three days back then.

Read more: Tech glitches mar SEBI new margin regime

“NSE has multiple telecom links with two service providers to ensure redundancy and we have received communication from both the telecom service providers that there are issues with their links due to which there is an impact on NSE system. We are working on restoring the systems as soon as possible. In view of the above all the segments have been closed at 11.40 and will be restored as soon as the issue is resolved,” NSE Spokesperson said.

Although tech glitch has been a recurring phenomena for NSE for the past few years, SEBI has not made public any of its analysis of it. Last year, brokers association ANMI had even shot-off a letter to NSE alleging severe loss to its members due to tech glitch. In 2017,NSE had to suspend trading for three hours after a tech glitch.

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NSE turns to Safaricom platform to boost stock trades

Capital Markets

NSE turns to Safaricom platform to boost stock trades

Nairobi Securities Exchange CEO Geoffrey Odundo. PHOTO | NMG

Safaricom’s #ticker:SCOM internet plan will save stockbrokers nearly a third of their costs and offer a secure network for traders.

The Nairobi Securities Exchange #ticker:NSE has tapped the telco as it upgrades its trading platform to provide a virtual network software that links it, the Central Depository and Settlement Corporation (CDSC) and traders.

NSE is replacing the Multi-Protocol Label Switching network that has been used since 2011 with the Software-defined Wide Area Network (SD-WAN) supported by Safaricom.

“The network interconnects the NSE, the Central Depository and Settlement Corporation and all the trading participants in the market to offer higher trading platform availability,” NSE CEO Geoffrey Odundo said on Friday.

“The SD-WAN will be transformational for the market as it will reduce connectivity costs to the brokers by approximately 30 per cent, ensure higher uptime and performance and increase network security,” he added.

NSE is keen on increasing market activity to spur the bourse which has suffered a multiyear decline due to the impact of coronavirus pandemic.

The sharp decline in the stocks market has been pushed by foreign investors who rushed to sell off their exposures in emerging markets wiping out billions of paper wealth by Kenyan investors.

According to the Capital Markets Authority quarterly bulletin, volumes traded decreased by 24.85 per cent to 969.57 million in the three months to December 2020 compared to 1,290.12 million in quarter four 2019.

“Equity turnover for quarter four of 2020 stood at Sh27.51 billion, compared to Sh45.01 billion registered in quarter four of 2019; a 38.88 per cent decrease confirming a decrease in investor participation at the bourse,” CMA Director, Regulatory Policy & Strategy Luke Ombara said.

End month market capitalisation recorded an eight per cent decrease to Sh2.3 trillion registered in December last year from Sh2.5 trillion at the end of 2019.

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LVB stock market suspension: Trading in Lakshmi Vilas Bank shares to be suspended from Thursday: NSE

Shares of Lakshmi Vilas Bank will be suspended from trading from November 26, the National Stock Exchange (NSE) said in a statement.

“Members of the Exchange are hereby informed that the trading in equity shares of Lakshmi Vilas Bank Limited shall be suspended w.e.f November 26, 2020 (i.e. closing hours of trading on November 25, 2020) on account of gazette notification dated November 25, 2020 issued by Department of Financial Services, Ministry of Finance,” NSE said.

Earlier in the day, the Reserve Bank of India said the amalgamation of the bank with DBS Bank India will come into force from November 27 and the moratorium imposed on the crisis-ridden lender will be removed on that day.

The RBI issued the statement within hours of the Cabinet clearing the Scheme of Amalgamation of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL).

“The amalgamation will come into force on the appointed date, i.e., November 27, 2020. All the branches of the Lakshmi Vilas Bank will function as branches of DBS Bank India with effect from this date,” the RBI said.

Depositors of LVB will be able to operate their accounts as customers of DBS Bank India with effect from Friday.

“Consequently, the moratorium on the Lakshmi Vilas Bank will cease to be operative from that date,” it said.

The RBI had superseded the board of LVB on November 17 following the imposition of a moratorium on the private sector lender.

DBS Bank India is making necessary arrangements to ensure that services, as usual, are provided to the customers of Lakshmi Vilas Bank, the RBI added.

As of end of September, a total of 12 foreign institutional investors (FIIs) held 8.65 per cent stake in the bank. They have consistently reduced their holding in the bank since at least 5 quarters from 16.45 per cent at the end of June quarter. Mutual funds on the other hand, hiked their stake in the lender to 6.40 per cent in the September quarter, from 4.78 per cent in the quarter before.

Retail investors have been consistently raising their stake in the lender so far this year, and own nearly 23.98 per cent stake, compared with 21.14 per cent at the end of December 2019.

Earlier this month, LVB said its net loss widened to Rs 397 crore in the quarter ended September, compared with a net loss of Rs 357 crore in the year-ago period. Its net interest income dropped 28 per cent to Rs 79.5 crore. The gross NPA stood at 24.45 per cent as at end September, compared with 21.25 per cent a year ago.

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Karvy Stock Broking Limited: Funds, securities worth Rs 2,300 crore settle in Karvy case: NSE

Investors with a fund balance of up to Rs 30,000 due from Karvy Stock Broking Limited have been settled, according to NSE spokesperson.

The spokesperson further added that while disciplinary proceedings are underway, funds and securities of around Rs 2,300 crore belonging to about 2,35,000 investors have been settled so far, with efforts focused on the settlement of small investors.

Earlier, leading stock exchanges BSE and NSE in December last year had suspended the brokerage’s trading licence for all segments due to non-compliance of the regulatory provisions of the bourses.

The move came after Sebi, through an order passed on November 22, 2019 barred Karvy from taking new clients in respect of its stockbroking activities and had also prevented it from using the power of attorney (PoA) given by clients after the broker was found to have allegedly misused clients” securities.

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