New Delhi: Market regulator SEBI has begun probe into the 900-point 'flash crash' of National Stock Exchange (NSE) index Nifty on Friday morning. The flash crash halted trade on the exchange for about 15 minutes. The NSE had blamed abnormal orders placed by stock broker Emkay Global for the crash and claimed there were no technical glitches in its system. In a statement issued on Friday evening, NSE said, "Stringent action taken against member Emkay Global which is disabled and made to unwind positions completely and the matter is being investigated thoroughly."
NSE, Head Business Development, Ravi Varanasi said, "Emkay Global Financial Services was asked to close out its positions arising out of erroneous trades, which they have done. The exchange then disabled the member from trading. There is no question of any glitch or malfunctioning in NSE's systems. The broker's dealer put in an erroneous quantity in the orders, which is being investigated." The circuit filter was triggered at 10 per cent and the cash market was stopped. The orders that were already in the system were executed in the next few seconds. The market was reopened within a few minutes since the price movement was on account of erroneous trades," he added.
A huge 900-point 'flash crash' in stock benchmark NSE Nifty on Friday morning caused panic in market, prompting regulator SEBI to begin a probe into the incident which briefly erased about Rs 10 lakh crore in market wealth. The incident occurred on a day when expectations were high for an upward rally on bourses, following some big-ticket reform measures approved by the government on Thursday evening, including on FDI in sectors like insurance and pension.
In a statement after the incident, which halted the trade in cash markets for about 15 minutes, NSE said, "The market circuit filter got triggered due to entry of 59 erroneous
orders which resulted in multiple trades for an aggregate value of over Rs 650 crore. "These orders have been entered by a trading member Emkay Global Financial Services on behalf of an institutional client.
"These non-algo market orders have been entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book thereby causing the circuit filter to be triggered. These orders have been identified to a specific dealer terminal," it added. "The market opened normally today and Nifty opened at
5,815. Nifty circuit filter got triggered at 9.50.58 hours upon which the cash market was closed automatically," NSE said.
"The exchange systems functioned normally without any glitch, but the above abnormal trades caused market closure automatically due to the index circuit filter getting triggered," the exchange added. "The market was reopened by the exchange with a pre-open phase at 10.00.22 hrs and trading resumed at 10.05 hrs. The market is functioning normally and the incident is being investigated," it said.
With Additional Inputs from PTI
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