SEBI Chairperson Launches IRRA Platform to Enhance Investor Risk Reduction

SEBI Abolishes 1% Security Deposit Mandate for Public Issues

Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (SEBI), has officially launched the Investor Risk Reduction Access (IRRA) platform at the Bombay Stock Exchange (BSE). Developed under the guidance of Market Infrastructure Institutions (MIIs) overseen by SEBI, the IRRA platform is designed to mitigate risks faced by investors during technical glitches at Trading Member (TM) ends, encompassing both primary and disaster recovery sites.

Key Points:

Launch Details:

The IRRA platform underwent a soft launch on October 3, 2023, with its official launch occurring on November 20, 2023.
The platform is tailored for trading members supporting Internet-based trading (IBT) and Security Trading through Wireless Technology (STWT) for their investors.
Notably, IRRA is not available for algo trading and institutional clients.

2. Invocation and Notifications:

In the event of a technical glitch impacting a TM’s ability to serve clients across exchanges from both primary and disaster recovery sites, TMs can invoke the IRRA platform.
Upon invocation, the platform downloads trades of the TM from all trading venues and sends SMS/email notifications to investors using internet trading or wireless technology.
These notifications include a link to access the IRRA platform, allowing investors to review the status of their investments, orders, and place orders for squaring off or closing positions.

3. Primary Goal of IRRA:

The main objective of the IRRA platform is to safeguard investors’ funds and ensure the protection of their positions.
Emphasis is placed on adopting a long-term investment strategy to enhance wealth generation, countering potential losses in the futures and options (F&O) segment.

4. Context and Need for IRRA:

The launch of IRRA comes in response to the increasing occurrences of technical issues faced by stock brokers, resulting in monetary losses for clients.
Recent incidents involving glitches at Zerodha and the National Stock Exchange (NSE) have underscored the necessity for robust risk mitigation measures in financial markets.

5. Incidents Highlighting the Need:

Glitches at Zerodha and the NSE have brought attention to the imperative need for resilient risk mitigation strategies.
In July of the current year, Zerodha customers faced issues in the BSE F&O (BFO) segment on the Kite platform, attributing glitches to internet service providers (ISP).
The NSE and NSE Clearing Ltd (NCL) paid Rs72.64 crore to SEBI in July 2023 to settle the February 2021 trading halt issue.

About IRRA:

Platform Origin:

The Investor Risk Reduction Access platform (IRRA) is jointly developed by stock exchanges following SEBI’s guidelines issued on December 30, 2022.
IRRA operates as a cloud-based platform connecting to all stock exchanges, brought up on a daily basis in a dormant state.

Purpose and Functionality:

The IRRA platform activates in the case of trading services disruption by a Trading Member (TM).
Its purpose is to provide investors with an opportunity to square off/close their open positions and cancel pending orders during technical glitches or unforeseen outages rendering the Trading Member’s site inaccessible.
In conclusion, the launch of the IRRA platform is a significant step in enhancing investor protection and resilience against technical disruptions in the dynamic landscape of financial markets, aligning with SEBI’s commitment to fostering a secure and investor-friendly trading environment.

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