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Investor Risk Reduction Access (IRRA) 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.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. IRRA Platform: Enhancing Investor Protection
  2. Need and Significance

IRRA Platform: Enhancing Investor Protection

Purpose and Functionality:
  • Risk Reduction: Developed to mitigate risks for investors in the event of technical glitches at the trading member’s end, both at the primary and disaster recovery sites.
  • Investor Opportunity: Enables investors to close open positions and cancel pending orders using the IRRA platform during technical glitches, ensuring continued market access.
Developed By:
  • Collaborative Development: Jointly developed by major stock exchanges, including BSE, NSE, NCDEX, MCX, and MSE.
Mechanism of Working:
  • Initiation: Trading members can invoke IRRA when facing technical glitches impacting client service across exchanges.
  • Exchange Monitoring: Stock exchanges can also monitor parameters and initiate IRRA enablement if disruptions affect trading services across all exchanges for a particular member.
  • Limited Functionality: IRRA is designed exclusively for canceling pending orders, not for initiating fresh positions.

Need and Significance:

  • Risk Mitigation: Addresses risks for investors in the face of technical disruptions, offering a solution to close positions during glitches.
  • Contingency Planning: Acts as a contingency service by stock exchanges, ensuring investor protection during crises.
  • Market Volatility: Especially crucial in volatile markets where swift actions are necessary for risk management.
  • Persistent Disruptions: Despite business continuity plans, certain disruptions like delayed recovery sites or cyber-attacks persist, making IRRA a valuable initiative.

-Source: Indian Express


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