Why are Indian Stock Exchanges holding special trading sessions on Saturday?

New Delhi: The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) will hold a special live session on May 18 to conduct intra-day switch-over at their respective disaster recovery sites.

The stock exchanges informed their trading members that a special live trading session is scheduled on Saturday, May 18, 2024 with the participating MIIs – BSE, NSE, ICCL, NCL, CDSL, NSDL and MSEI. During this special live trading session, the mentioned MIIs will undergo intra-day switch-over to their respective disaster recovery sites.

This special trading session will be applicable only on equity and equity derivatives segments.

“This will be a graceful shutdown from the primary site. This is being conducted on the basis of specific discussions with SEBI and their Technical Advisory Committee, to restore operations and deal with any unexpected event impacting their operations. To assess the preparedness of MII, the DR site “within the prescribed recovery time in such an event,” the Bombay Stock Exchange said in a notice to its members.

NSE and BSE are conducting a special session for live trading in equity and F&O segments on Saturday, May 18, 2024, with intra-day switchover from the primary site to the disaster recovery site, brokerage firm Zerodha said.

Zerodha said this is the first time that stock exchanges are switching trading sites from their primary sites to a disaster recovery (DR) site during a live trading session.

“We have been informed by the Stock Exchange through a circular that there is a possibility of cancellation of trades executed during the transition phase of switching from the Primary to the DR site. If such a situation arises, your close during the first session The position will be reopened after which you will have to exit the position again in another session,” Zerodha said.

It said intraday trading is restricted during the special Saturday trading session due to anticipated low trading volumes. Since volume will be low, spreads may be wide leading to potential losses during auto square off. Additionally, the exchanges have imposed a 5 per cent lower price band for all shares, including those traded in the derivatives segment.

“This increases the possibility of shares hitting the upper/lower circuit, potentially leading to opening of long or short positions or square-off at the end of the second trading session, which is in the best interest of our clients,” Zerodha said. It is not in our interest.”