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:
- IRRA Platform: Enhancing Investor Protection
- 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
