Markets regulator Sebi on Friday asked stock exchanges and clearing firms to set up a platform to help investors amid disruptions in trading member-side services.

Following extensive consultations, the regulator has decided to launch the Investor Risk Reduction Access (IRRA) platform with a deadline of 1 October next year to make the platform operational.

The move comes against increased glitches in the Trade Membership (TM) system. In this case, investors with open positions face the risk of being unable to liquidate them, especially during market volatility.

The exchanges will develop a joint platform to provide IRRA services to investors with an opportunity to liquidate/close positions and/or cancel pending orders in the event of disruption of trading services offered by TM.

In an announcement on Friday, Sebi said the IRRA service would support multiple market segments across various exchanges.

“TM may, in the event of a technical failure leading to interruption of trading services, request the activation of the IRRA service following the procedures prescribed by the stock exchange from time to time, and the IRRA shall be activated upon receipt of such request,” it said.

According to the regulator, exchanges should enable the suo-moto service only when there is an outage in the trading services of all the exchanges TM belongs to.

“If TM’s trading service with one/part of the exchanges is interrupted, TM may request to enable the service if TM is a member, in which case the trading member shall use the service on all exchanges,” the circular said.

Once the IRRA service is authorised, relevant investors can liquidate/close open positions across industries and exchanges and/or cancel pending orders on exchanges across sectors.

Once TM’s systems are restored, the reverse migration from the IRRA system will be complete.

“After TM’s trading system is restored, TM will update their system to obtain data from the exchange to ensure investors can get the latest order and transaction status,” the circular said.

Sebi pointed out that stock exchanges should ensure reliable and regular testing of the IRRA platform from time to time to ensure the smooth functioning of the service.

“In the event of a disruption after the cut-off time for enabling IRRA services, the exchanges, based on their assessment and in consultation with Sebi, may extend the market hours if required,” it added.