Securities and Exchange Board of India (SEBI) has launched a new platform to protect trading members and brokers from asset loss. Its name is IRRA.
This platform will act as a safety net in case of any technical glitch. This will help trading members to cancel an order at a time when they are unable to do so on the main platform and disaster recovery site due to technical glitches, resulting in losses.
This platform has been created jointly by BSE, NSE, NCDEX, MCX and MSE. It was launched on Monday by SEBI Chairperson Madhabi Puri Buch. While launching it, he also explained how this platform will work. He said that this platform will give investors an opportunity to close their open positions or cancel any order.
This platform will help in case of any technical glitch or such unknown situation when it is difficult to do any work related to the order on the main and recovery site. He said that it has been developed to reduce the risk of investors. He made it clear that this platform cannot be used for taking new orders or positions. This will be used only to cancel the order.
Why was this needed?
As dependence on technology for trading is increasing, its risks are also increasing. Many times such situations arise where the main and recovery platforms stop working due to some unknown fault. In such a situation, investors are not able to make any changes related to their trade. The problem becomes bigger when there is a period of sharp fluctuations in the market and an investor wants to close his position or cancel the order. In such a situation he has to suffer financial loss.
‘There should never be a need to use’
Madhuri Puri Butch said that the hope is that there should never be a need to use this platform. He said, “Think of it as a safety net for an artist walking on a thin rope in the air. He hopes that he never needs it, but it is also necessary to have it.”
How will this work?
During any technical glitch, an investor may demand to start it. Exchanges will activate it after initial investigation. Exchanges themselves can also start this. If they feel that there has been a technical glitch, there are other errors in the order or people are complaining about trading on social media.
As soon as this service is activated, it will download all the trades of that investor. After this, these trades will be sent to the investor through SMS or email. Along with this, a link will also be sent to him to access IRRA. Once the investor gets permission to enter IRRA, he can cancel his pending orders from here. With IRRA, this work can be done for any exchange and any segment.
