The Securities and Exchange Board of India (SEBI) has proposed the introduction of an Investor Risk Reduction Access (IRRA) platform in case of disruption of trading services provided by the trading member (TM) in December 2022. This platform was recently introduced to provide a safety net to investors if they face any technical glitches or outages. This platform will be available to TMs on Internet-based trading (IBT) and security trading through wireless technology (STWT) but not for algorithmic trading (Algo-trading) or institutional clients.
SEBI was formed through the resolution of the Government of India as a non-statutory body on April 12, 1988 to regulate the securities and commodity market in India. Later on, it was established as a statutory body in 1992 by enacting the SEBI Act of 1992. SEBI comes under the Ministry of Finance, Government of India.
The platform was developed jointly by the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), National Commodity and Derivates Exchange (NCDEX), Multi Commodity Exchange (MCE), and Metropolitan Stock Exchange of India (MSE). IRPA platform reduces the risk of the investors from the end of trading members at the primary as well as the disaster recovery site when they face technical glitches.
How the Platform Works
This platform is activated when trading services become unavailable due to any technical glitches or disruptions. In such a situation, the platform retrieves the investor’s trade data from the affected trading member’s system; sends notifications to the investors, informing them of the disruption; and provides them with a link to access the platform. The link enables investors to log in to the platform using their existing credentials, open their positions and pending orders, place orders to close open positions, cancel pending orders, and monitor the status of their portfolios.
Benefits of the Platform
- One of the most important benefits of this platform is that it allows investors to close or cancel their pending orders in times of technical glitches so that they do not lose on pending orders. However, investors cannot create any new orders on this platform.
- The platform has a suo moto initiative. It means that the platform can, by itself, initiate the service if and when needed. It is not necessary that the service is provided only when they are requested.
- With the growing risk of hacking and cyber-attacks, a platform like this assures investors that their investments are protected and that they can take action to manage their portfolios during disruptions.
The stock exchanges, in addition to the platform, will monitor the parameters like connectivity, order flow, social media posts, etc. The traders will be protected in case of a cyber-attack by being on another network to protect critical infrastructure. Later, the member can collect the data from exchanges.
Conclusion
To conclude, platforms like these assure the investors to safely invest in the stock market. With the number of investors growing, and the advancement of technology every year, this is a great initiative. With a large number of investors, it is mostly difficult to control sudden changes and hurdles. So, this platform has the scope to reduce the risk that is associated with technical glitches which are not in the control of any user. It is a good initiative to encourage many more users to participate in investing. We can say that the IRRA platform contributes to a more investor-friendly market environment.
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