Bourses ready to meet SEBI directive on trade order taking capacity

Indian stock exchanges are well equipped to handle any increase in orders hitting their trading systems in light of the SEBI directive.

Recently, SEBI directed the exchanges to have installed capacity of at least 1.5 times the projected peak load wherein projected peak load had to be calculated for the next 60 days based on the per-second peak load trend of the past 180 days. .

The revision was a result of the recommendations of the SEBI Technical Advisory Committee (TAC) which reviewed the framework adopted by the bourses and clearing corporations for planning their capacities.

According to the NSE, it has capacities across all three types of systems — one the real-time system which is the trading systems, batch systems which is the capacity used to process data at the end of the day such as clearing and settlement, and interactive systems such as the website.

For real-time systems, the bourse calculates the maximum throughput in a day for the last six months and budgets for 1.5 times the required capacity. For batch systems it takes the capacity at six to seven times of what is required.

It is assayed as to when a system holds up or saturates by running an average messages at 3-3.5 times the daily average. That is, if the daily average is 20,000 messages, the exchange runs 60,000-70,000 messages to identify bottlenecks which hold up speed and give variable output. For interactive systems, response time is critical and it depends on demand and supply. A moving average load of messages/ requests over 30 seconds is taken and 10 times the required capacity earmarked.

For the long-term planning cycles, the NSE budgets for 10 times the estimated capacity and the horizon is 2-3 years based on cost/ availability and technology. The BSE, in a statement, said it currently has capacity to handle 10 times its current average order volumes. Its current capacity allows it to take five lakh orders a second. As and when the BSE peak usage reaches 50 per cent of its capability, BSE adds more capacity.

According to Metropolitan Stock Exchange of India officials, SEBI, through the exercise, intends to obviate system crashes, and thus protect investors from being adversely affected in case of heavy order inflows. Hence, they have kept capacity at a level far higher.