SEBI to Ensure Smooth Trading: BSE and NSE to Serve as Alternative Platforms During Exchange Outages

The Securities and Exchange Board of India (SEBI) has introduced new measures to ensure seamless trading on stock exchanges during technical outages. This framework, effective from April 1, 2025, aims to enhance investor protection and maintain market stability in case of unforeseen disruptions.

BSE and NSE as Alternative Trading Venues

Under the new framework, the BSE and NSE will act as alternative trading venues for each other during outages. If one exchange experiences technical issues, investors can continue trading in interoperable segments like equities, derivatives, and currency markets on the other exchange. This interoperability will cover cash, equity derivatives, currency derivatives, and interest rate derivatives.

Hedging and Margin Netting

Investors can hedge their positions in identical or correlated products, like single stock derivatives and index derivatives, on the alternative exchange during an outage. Margins for such positions will be netted off. For securities exclusively listed on one exchange, the other exchange will create "reserve contracts" to ensure trading continuity.

SOP and Notification Procedure

The BSE and NSE will jointly prepare a Standard Operating Procedure (SOP) outlining responsibilities, processes, and necessary system updates. This SOP must be submitted to SEBI within 60 days. The affected exchange must notify SEBI and the alternative exchange within 75 minutes of an outage. The alternative exchange will then activate its continuity plan within 15 minutes of receiving the intimation.