Investor Risk Reduction Access Platform

December 31, 2022

Stock exchanges have been directed by the Securities and Exchanges Board of India (SEBI) to set up an Investor Risk Reduction Access (IRRA) platform. With the growing reliance on technology in the securities market, there is an increase in instances of glitches in trading members’ systems, some of which resulted in the disruption of trading services. In these cases, investors with open positions are at risk of the non-availability of avenues to close their positions, especially at times when the markets are volatile.

What is an Investor Risk Reduction Access (IRRA) platform?

The Investor Risk Reduction Access (IRRA) platform will be jointly developed by the stock exchanges to enable investors to square off their position or cancel the pending orders if there is a disruption of services provided by the trading members. Trading members are those who trade on their own account as well as on the account of their clients.
According to the new SEBI circular, the trading members can request the enablement of the IRRA service in case they face technical glitches that can cause disruption in the trading services.
The market regulator has directed the stock exchanges to monitor parameters like connectivity, social media posts, order flow, and others. It also called on the stock exchanges to initiate the enablement of the service if required, irrespective of the trading member’s request.
The SEBI also called on the stock exchanges to put in place a detailed framework to support the reverse migration from the IRRA system to the trading member’s trading system when the trading system is revived and a request is made in this regard.
The stock exchanges are also required to periodically test the IRRA platform from time to time for the seamless functioning of the service.
The SEBI has asked the stock exchanges and clearing corporations to operationalize the IRRA platform by October 1, 2023.

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