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Investor Risk Reduction Access platform

Context:

  • The Investor Risk Reduction Access (IRRA) is a platform that will act as a ‘safety net’ for investors in case of technical glitches faced by a trading member or a stock broker registered with SEBI.
  • It will provide investors an opportunity to close open positions and cancel pending orders in case of disruption at the stock brokers’ end.
  • IRRA has been jointly developed by all the stock exchanges – BSE, NSE, NCDEX, MCX and Metropolitan Stock Exchange of India (MSE) and was launched by Securities and Exchange Board of India (SEBI).

What is the IRRA platform? 

  • IRRA platform has been developed to reduce risks faced by investors in the eventuality of technical glitches at the trading member’s end at both the primary site and disaster recovery site.
  • Its purpose is to provide investors with an opportunity to square off/close their open positions and cancel pending orders using the IRRA platform in case of technical glitches or unforeseen outages that render the trading member’s site inaccessible.
  • IRRA platform has been designed to reduce risks for investors participating in the market. It is not meant for taking fresh positions or orders, but only to cancel the pending orders.

Why was there a need for it?

  • With increasing dependence on technology in the securities market, there has been a rise in instances of glitches in trading members’ systems, some of which lead to disruption of trading services and investor complaints.
  • In such instances, investors with open positions are at risk of non-availability of avenues to close their positions, particularly if markets are volatile.
  • As the respective business continuity plans, if any, of the trading members, may not be able to prevent disruption in some cases like the trading member being unable to move to the Disaster Recovery site within stipulated time and cyber-attacks, SEBI, in December last year, announced that a contingency service will be provided by the stock exchanges in the event of such disruption.

How will the IRRA platform work?

  • IRRA can be invoked by trading members when they are faced with a technical glitch at their end impacting their ability to service clients across exchanges from both – the primary site and disaster recovery site, where relevant.
  • Even stock exchanges can also monitor parameters like connectivity, order flow and social media posts, and suo moto initiate the enablement of the IRRA service, if needed, irrespective of any such request by the trading member, according to SEBI.
  • This service shall be enabled by the exchanges, suo moto, only in case of disruption of trading services of trading member across all the exchanges, where the trading member is a member.
  • On invocation, after basic checks, the platform downloads trades of the trading member from all the trading venues and sends SMS/email to investors using internet trading or wireless technology along with a link to access IRRA.

How will the platform help investors?

  • Once the investors are authorized to access the IRRA platform, investors can view and cancel pending orders across all segments and all stock exchanges from the order book, square off/close the open positions across segments and exchanges and cancel the orders across segments which are pending at the exchanges.
  • IRRA is not available for algo trading and Institutional clients. Securities available for trading and settlement on a Trade-for-Trade basis will not be available for square-off, as per the Frequently Asked Questions (FAQ) available on the BSE’s website.

How can investors login into the IRRA platform? 

  • Once the trading member is migrated to the IRRA platform, the investors of the affected trading member will be enabled to access the IRRA platform through a secure login system using their Unique Client Code (UCC) or investor’s PAN number.
  • Investors will get access through a one-time password (OTP) sent to their registered mobile numbers and email IDs for authorization. The communication will also include a link to access the IRRA platform.
  • Access to the IRRA platform will be available to the investors over a new Internet-based Based Trading (IBT) web URL and mobile application.
  • The IRRA platform is different from the web URL / mobile application used by the investor, as provided by the affected trading member.
  • Investors can also download the mobile application beforehand for ease of login, in case of an unforeseen contingency.

Syllabus: Prelims

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