Stock exchanges mentioned there was some inconvenience in conducting commerce and settlement on February 7 when the Maharashtra authorities declared a vacation within the state to mourn the demise of Lata Mangeshkar and banks had been shut whereas inventory markets remained open. However, market intermediaries had been capable of end the settlement as per schedule and there was no disaster, in response to sources near the change.
Stock markets usually have 10 holidays a yr, whereas banks are closed for 22-23 days for numerous holidays. “On such occasions, when banks are shut and markets remain open, everything is planned in advance and all the systems are put in place much earlier,” mentioned a supply.
“However, on February 7, the RBI announced the bank holiday on February 6 late at night. There was no time to make changes in the system and corporate actions needed time to make changes. Depositories, clearing corporations and exchanges also need time to make the changes in the system. There were hardly four or five hours available in the night to make changes. It was not enough,” mentioned sources near the bourses.
Besides, the vacation was solely in Maharashtra and different states had been functioning usually. “We have investors from various parts of the country, not just Maharashtra alone. It was not possible to shut the exchanges at such a short notice,” mentioned an official supply.
Some international banks had written to the NSE Clearing Ltd highlighting the issues confronted by some buyers, primarily mutual funds and international buyers, because of the financial institution vacation on February 7.
When contacted, Sebi and RBI didn’t reply to mails from The Indian Express. Market sources mentioned some buyers did face inconvenience in arranging funds at a brief discover within the wake of the financial institution vacation. “But trade settlements were conducted as per schedule. There was no crisis. The inconvenience happened because of the short notice for the holiday.”
Sebi had launched T+1 buying and selling as an alternative of T+2 system earlier.
Vijay Singhania, chairman of brokerage platform TradeSmart, mentioned, “It is high time we have a system in place as far as sudden holidays are concerned. We just missed a systemic failure when stock exchanges were allowed to function but the banking system was shut down.”
