INDIA: SEBI Introduces Investor Risk Reduction Access (IRRA) Platform

Tuesday January 3 2023

On 30^th December 2022, the Securities and Exchange Board of India (SEBI) has introduced Investor Risk Reduction Access (IRRA) platform in case of disruption of trading services provided by the Trading Member (TM)

With increasing dependence on technology in securities market, there is a rise in instances of glitches in trading members’ systems, some of which lead to disruption of trading services and investor complaints.

To address the issue, SEBI had extensive consultations with stock exchanges, clearing corporations (CCs) and TMs.

The following has been decided:

• Development of the service:

A joint platform to provide Investor Risk Reduction Access (IRRA) service shall be developed by the exchanges to provide the investors an opportunity to square off/close the open positions and/or cancel pending orders in case of disruption of trading services provided by the Trading Member.

• Enablement of IRRA service:

Trading Members (TMS), upon facing technical glitches which lead to disruption of trading services, can request for enablement of the IRRA service as per the procedures specified by the stock exchanges from time to time and IRRA shall be enabled on receipt of such requests.

• Access to Investors:

Once the service is enabled, all the investors of the TM shall be informed by the exchange of the availability of the service through email/SMS and a public notice on exchanges’ website. TMs shall also communicate the same by displaying on their website.

Investors can login to the service using either the Unique Client Code (UCC) or the PAN number and they shall be authorized by a One Time Password (OTP) to be sent to their registered mobile numbers and email ids.

• Actions on IRRA service:

Once successfully authorized, the investors can square off/close the open positions across segments and exchange/s and/or cancel the orders across segments which are pending at the exchange/s.

• Reverse Migration to the TM’s systems:

Stock exchanges shall design a detailed framework for reverse migration from IRRA system to the TM’s trading system, as and when the TM’s trading system is revived successfully and a request is made in this regard.

Exchanges shall ensure that credible and periodic testing of the IRRA platform is carried out from time to time for smooth functioning of the service.

Stock exchanges shall issue guidelines in this regard giving details like cut-off times for enablement of IRRA service, handling of various scenarios of open positions, framework for reverse migration etc

In case of disruptions after the cut off time for enablement of IRRA service, exchanges, based on their assessment and in consultation with SEBI, may extend the market hours, if needed.

Stock exchanges and CCs shall put in place appropriate systems to ensure compliance of the provisions of this circular on or before October 01, 2023

Stock exchanges are directed to:

• Set up the platform;
• Bring the provisions of this circular to the notice of their members / participants and also disseminate the same on their websites;
• Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision;
• Communicate to SEBI, monthly milestones as per the implementation plan and status against the milestones including, in their monthly development reports;
• Publish detailed guidelines/ Frequently Asked Questions (FAQs).

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