SEBI circular HO/38/44/12(1)2026-MIRSD-TPD1 · 09 Jan 2026
Official title
Review of Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems
Summary
Check the official recordSEBI has revised the framework for addressing technical glitches in stock brokers' electronic trading systems to streamline compliance, simplify reporting, and rationalize technology requirements. The updated framework applies to stock brokers providing IBT/STWT platforms with over 10,000 registered clients. Key changes include extending the glitch reporting window to two hours, centralizing submissions to a common reporting platform, and exempting specific issues such as global cloud disruptions or back-office glitches that do not impact trading. Financial disincentives are now rationalized based on glitch severity and frequency. Stock exchanges are mandated to issue detailed guidelines, monitor systems via API-based mechanisms, and maintain a public record of reported incidents. This circular supersedes the 2022 framework and takes immediate effect.
What you must do
Key dates
Who is affected
Thresholds
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If you do not comply
भारतीय प्रतिभूति और विनिमय बोर्ड Securities and Exchange Board of India
CIRCULAR
HO/38/44/12(1)2026-MIRSD-TPD1
January 09, 2026
To All recognized Stock Exchanges All Registered Stock Brokers through Recognized Stock Exchanges
Dear Sir/ Madam,
Sub: - Review of Framework to address the ‘technical glitches’ in Stock Brokers’ Electronic Trading Systems’
SEBI vide Circular No. SEBI/HO/MIRSD/TPD-1/P/CIR/2022/160 dated November 25, 2022 laid down a comprehensive framework to address the technical glitches in stock brokers’ electronic trading systems. Subsequently, Stock Exchanges also issued detailed guidelines in this regard on December 16, 2022.
SEBI received several representations from the various stakeholders and Industry forum regarding need to review the present framework on Technical glitches. Based on the representation received and the analysis of the technical glitch data, a public consultation paper was prepared and disseminated on SEBI website to obtain views from all the stakeholders. A views/feedback obtained on a consultation paper was analysed and discussed with stakeholders.
The extant technical glitch framework for the stock brokers is thus modified. The modification is carried out based on the following broad principles:
3.1 Ease of compliance: The eligibility criteria has been streamlined to exclude smaller size stock brokers from the technical glitch framework to reduce overall compliance of such stock brokers.
3.2 Exemptions from applicability: The technical glitches which are outside the stock brokers’ trading architecture, glitches that don’t directly affect the trading functionality and those which have negligible impact have been exempted from the technical glitch framework.
3.3 Simplifying the reporting requirement: Extension of time for reporting of technical glitches (from one hour to two hours), consideration of trading holiday’s while submitting reports and streamlining the reporting requirement from reporting to all the exchanges to a single reporting platform (i.e. Common Reporting Platform)
3.4 Rationalised and cost effective based technology requirements: The requirements for the capacity planning, software testing and DR drill have been rationalised based on the size of the stock brokers & their technology dependency.
3.5 Rationalisation in disincentive structure: The financial disincentive structure has been rationalised considering the exemptions, type of glitches (major or minor) and the frequency of the occurrences.
The revised framework for Technical glitch is as under.
Definition of Technical Glitch:
5.1 “Technical glitch shall mean any malfunction in the electronic system of stock broker, including malfunction in its hardware, software, networks/bandwidth, processes or products or services, directly or indirectly related to trading and risk management, occurred during trading session of stock exchange. The malfunction in the systems of stock brokers or the one outsourced from any third parties, which may lead to either stoppage, slowing down or variance in the trading and risk management functions such as log-in, order placement (including modification, cancelation, execution, confirmation, status), allocation and viewing of margin/ collateral/ funds etc., for a contiguous period of five minutes or more.”
5.2 The above definition of technical glitches is subject to the condition that the following types of technical issues in the system of stock brokers shall not be considered as technical glitches irrespective of the time of occurrence and accordingly need not be reported to Exchanges;
i. Technical glitches occurred due to global issues such as malfunction or technical disruption at the cloud service providers or any other global technology provider or any technical issue causing widespread disruption ii. Technology disruption due to technical issues at MII iii. Technological glitches observed while processing of new trading account (KYC process) iv. Technical issues at the Back-office which does not impact the trading and settlement of the clients v. The failure of payment gateway applications due to technical issues exist at banks or at the service provider or at payment aggregators end. vi. Technical issues observed in the decision support tools such as technical charts, profit and loss statements, back office reports etc.”
5.3 Exchanges have introduced financial disincentive structure for occurrence of technical glitches. In this context, financial disincentive structure shall not be applicable for the technical glitches which do not affect the stock broker's ability to provide seamless services to their clients. In case of the following types of technical glitches, the financial disincentive structure shall not be applicable:
Stock exchanges shall issue detailed guidelines in this regard in consultation with SEBI.
Applicability of framework:
6.1 The framework shall be applicable to the stock brokers providing IBT/STWT trading platforms and having more than 10,000 registered clients (excluding closed accounts) as on 31st March of previous financial year.
6.2 Stock exchange shall issue detailed guidelines in this regard and disseminate the list of applicable stock brokers.
Reporting Requirements:
7.1 Stock brokers shall inform regarding the technical glitch to the stock exchanges and also to their clients within 2 hours from the time of occurrence of the glitch. Exchanges in turn shall disseminate the technical glitch incidents on their website.
7.2 Stock brokers shall inform their clients regarding the occurrence of technical glitch by disseminating information on their website and any other mode such as SMS/email/pop-up in mobile based/ web based trading application etc.
7.3 Stock brokers shall submit a Preliminary Incident Report (as per the format prescribed by stock exchanges) to the stock exchange within T+1 day of the incident (T being the date of the incident). However, if T+1 day falls on a trading holiday; submission may be done on next trading day.
7.4 Stock brokers shall submit a Root Cause Analysis Report (RCA) (as per the format prescribed by stock exchanges) of the technical glitch to stock exchange, within 14 working days from the date of the incident.
7.5 Stock brokers shall submit information/reports mentioned above, on ‘Samuhik Prativedan Manch’ i.e. common portal for submissions by stock brokers.
7.6 All technical glitches reported by stock brokers as well as independently monitored by stock exchanges, shall be examined by the stock exchanges for suitable actions.
Capacity Planning:
8.1 Increasing number of investors create additional burden on the trading system of the stock broker and hence, adequate capacity planning is prerequisite for stock brokers to provide continuity of services to their clients. Stock brokers shall do capacity planning for entire trading infrastructure i.e. server capacities, network availability, and the serving capacity of trading applications.
8.2 Stock brokers shall monitor peak load in their trading applications, servers and network architecture.
8.3 Stock exchanges shall issue detailed guidelines with regard to capacity planning, peak load, and new capacity required to tackle future load on the system of the stock brokers. The extant guidelines shall be rationalised based on the size of the stock brokers & their technology dependency.
Software testing and change management
9.1 Software applications are prone to updates/changes and hence, it is imperative for the stock brokers to ensure that all software changes that are taking place in their applications are rigorously tested before they are used in production systems. Software changes could impact the functioning of the software if adequate testing is not carried out resulting technical glitches in such software.
