BSE, NSE to conduct special live trading session on 2-Mar-24

The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) has announced a special live trading session scheduled for Saturday, 2 March 2024. This session aims to fortify the exchange's operations against unforeseen incidents that could disrupt normal trading activities. NSE issued a circular on 14 February urging members to take note of this event which includes an intraday switch over to a disaster recovery (DR) site.

Background & Session Details

The decision to conduct this special session aligns with the mandate from the Securities and Exchange Board of India (SEBI), which requires market infrastructure intermediaries (MIIs) to implement business continuity plans. In the event of emergencies such as security breaches, the DR site serves as a temporary location for uninterrupted market operations. SEBI's circular on 22 March 2021 laid down guidelines for business continuity plans and disaster recovery sites reflecting the importance of ensuring seamless market functionality.

The special live trading session on March 2 will be executed in two phases. The first phase, lasting 45 minutes, will commence at 9:15 am. Subsequently, the second session will start at 11:30 am and conclude at 12:30 pm. Each session will incorporate measures to maintain market stability, including circuit limits for futures contracts and securities in the Future and Options (F&O) segment.

Special sessions include specific timings for the pre-open phase with the first session's pre open starting at 9 am and ending at 9:08 am. For the second session pre open activities will occur from 11:15 am to 11:23 am. Notably, 2 March being a settlement holiday means that purchases made in the equity market on 1 March will be settled on Monday 4 March.

During the special trading session on 2 March all futures contracts will be allowed to move within a range of 5 percent. In the Future and Options (F&O) segment, securities will have upper and lower circuit limits of 5 percent. However, for those securities with a 2 percent circuit limit, that limit will remain unchanged.

Initially scheduled for 20 January the special session was rescheduled due to the Ram Temple consecration ceremony in Ayodhya which resulted in a full fledged trading session on January 20. And 22 January was declared a holiday for stock markets.

(Trading Session 1) Live Trading at the Primary Site

Before the live trading session begins there will be a Pre Open session which runs from 9:00 AM to 9:08 AM. During this time investors can place orders in preparation for the market opening. Normal trading sessions will start at 9:15 AM and go until 10:00 AM. This is the time when most trading activities happen. Additionally, during this same time frame from 9:15 AM to 10:00 AM, there's also the Equity F&O session.

(Trading Session 2) Live Trading from the Disaster Recovery (DR) Site

For the second trading session, there will be a Pre Open session starting at 11:15 AM and concluding at 11:23 AM. During this period investors can place orders in preparation for the market opening. Following this the Normal Market session begins at 11:30 AM and runs until 12:30 PM. Simultaneously, from 11:30 AM to 12:30 PM, Derivative session also takes place. Finally, the Closing Session commences at 12:40 PM and concludes by 12:50 PM marking the end of the trading day.

What Is A Disaster Recovery Site?

A disaster recovery site is like a backup location for a company's operations, including stock exchanges and financial institutions. If there's an emergency, such as a security breach or a natural disaster, the company can temporarily move its operations to this backup site. This ensures that normal business activities can continue without major interruptions.

SEBI, the regulatory authority, issued guidelines in March 2021 outlining how stock exchanges, depositories, and clearing corporations should plan for emergencies and set up these backup sites. As technology improves and processes become more automated, SEBI felt it was necessary to review and update these guidelines. One key aspect they focused on was reducing the time it takes to switch from the main data center to the disaster recovery site, making the process faster and more efficient.

Final Words

The forthcoming special live trading session on 2 March highlights NSE's commitment to ensuring the resilience of market operations. By implementing stringent business continuity plans and leveraging disaster recovery sites, exchanges like NSE mitigate risks and uphold the integrity of the financial markets and boosting investor confidence and stability.