SEBI LAUNCHES IRRA: ENHANCING INVESTOR SAFETY
Why in the News?
- Madhabi Puri Buch, SEBI Chairperson, unveils Investor Risk Reduction Access (IRRA), a collaborative effort by major stock exchanges: BSE, NSE, NCDEX, MCX, and MSE.
Purpose of IRRA
- IRRA acts as a safety net for investors, designed to address technical glitches faced by trading members or stock brokers, ensuring a safety mechanism during disruptions.
- Specifically created to mitigate risks during unforeseen disruptions that make a trading member’s site inaccessible.
Addressing Technological Glitches
- Growing reliance on technology in the securities market has led to increased instances of glitches in trading systems, disrupting services and causing concerns for investors.
- IRRA provides a mechanism for investors to square off/close open positions and cancel pending orders in times of technical disruptions.
Contingency Service
- SEBI emphasizes the importance of a contingency service like IRRA to address disruptions, providing investors with a safety net in case of unforeseen technical issues.
- IRRA aims to ensure that investors with open positions have avenues to close them, especially in volatile markets.
Invocation and Functionality
- IRRA can be invoked by trading members facing technical glitches impacting client services across exchanges.
- Stock exchanges can also enable IRRA suo motu in case of disruptions in a trading member’s services across all exchanges.
Access and Functionality for Investors
- Investors, once authorized, can access the IRRA platform to view and cancel pending orders and close open positions across segments and exchanges.
- Not available for algo trading and institutional clients. Certain securities under Trade-for-Trade settlement are not available for square-off.
Migration Process
- Trading members can migrate to the IRRA platform after efforts to restore the primary and DR site, ensuring a smooth transition.
- Reverse migration is allowed with specific guidelines and a limitation of one reverse migration during a trading day.
IRRA represents a crucial step in enhancing investor safety during technical disruptions, aligning with SEBI’s commitment to ensuring a resilient and secure trading environment.