 "NSE operates normally today; Sebi may order probe as questions still linger")
National Stock Exchange (NSE) operated normally on Tuesday, a day after a technical glitch caused a five-hour disruption in trading, but rattled traders demanded the country's biggest exchange take measures quickly to prevent a recurrence.
All trading systems at NSE, including price quotations for individual stocks, were operating normally, with share volumes recovering and the broader NSE Nifty rising as much as 0.6 per cent to a second consecutive record high.
But brokers said the disruption, the biggest to hit the country's exchanges, had further dented confidence in the NSE at a time when the company's plans for an initial public offering (IPO) had already been halted by a regulatory probe into whether it provided unfair access to its servers to some brokers.
Some traders said they were looking to open trading accounts with rival BSE, even though its trading volumes are only a fraction of NSE's. A third stock exchange in India, Metropolitan Stock Exchange (MSE) of India, widely referred to with its former acronym MCX, has negligible volumes.
NSE is due to release a report explaining the reasons behind the disruption as early as Tuesday. It faces strong criticism for the length of time it took to resolve the issue, and the conflicting messages sent to brokers as the exchange tried several times to restart trading.
"It was a matter of great concern," said Anupam Singhi, chief operating officer of financial firm William O'Neil India.
"The onus is now on NSE and how they look into such issues," he added. "This is an opportunity for BSE and MCX to create some business for themselves."
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Others said the exchange needed to be better prepared for disruptions in future.
Reshmi Khurana, managing director at Kroll, said NSE should respond by conducting a thorough investigation into what went wrong and work to address potential recurrences including establishing a contingency plan and setting up a crisis team.
"The onus is on a company to respond to a crisis," she said. "Companies need to be more proactive than reactive in order to avoid getting caught out on similar crisis situations."
The NSE — owned by domestic financial institutions such as State Bank of India and units of foreign firms such as Citigroup Inc and Goldman Sachs Group Inc — is already under intense regulatory scrutiny.
Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi has said the regulator is seeking to appoint a forensic auditor to probe whether NSE employees could have colluded with brokers to allow them early access to its brokers.