Securities Broking Operations — how a trade actually travels

What a "trade" really is

In the financial market, trade means to buy and/or sell securities. The workbook gives a tighter definition worth memorising: a trade is the conversion of an order placed on the Exchange into a pay-in and pay-out of funds and securities. A trade does not end when the order matches. A trade ends with the settlement of the order placed.

That single sentence explains why this chapter carries the largest weight in the paper. Everything a back-office person does sits between "order matched" and "settlement complete".

The five steps of the trade life cycle

1. Placing of an order by the investor / client / broker.
2. Risk management and routing of the order through the trading platform.
3. Matching of the order and its conversion into a trade.
4. Confirmation of trades.
5. Clearing and settlement of trades.

Now map those five steps onto the three offices of a broking firm — this mapping is asked directly:

In one line: the front office makes and takes orders and executes them; the middle office is risk management and surveillance; the back office is confirmation, payments, settlements and accounting. The back office is where the trade ends.

Step 1 — placing the order

The Trader Workstation (TWS)

The TWS is the terminal from which a member accesses the Exchange trading system. Each trader logs in with a unique Trading Member ID and User ID.

A TWS shows two families of information:

• The member's own transaction information — order entered, order modified, outstanding order, order log, trade details.
• Market information — order book, security/contract price information, security/contract trade information, additional information.

Exchanges also let members build their own front ends and connect them. The products offered are CTCL (Computer to Computer Link), IBT (Internet Based Trading), DMA (Direct Market Access), STWT (Securities Trading through Wireless Technology), ALGO (Automated / Algorithmic Trading) and SOR (Smart Order Router). Members connect by lease line, VSAT or co-location.

Co-location (also called proximity hosting) is the facility where a broker's or data vendor's systems are allowed to sit inside or very close to the exchange premises, connecting to the trading platform through a direct and private network.

Evidence of the client's order — the rule that saves brokers in disputes

To stop unauthorised trading, all brokers shall execute trades of clients only after keeping evidence of the client placing such order. Acceptable forms:

(a) physical record written and signed by the client, (b) telephone recording, (c) email from an authorised email id, (d) log for internet transactions, (e) record of SMS messages, (f) any other legally verifiable record.

Where instructions come over the telephone, the stock broker shall mandatorily use a telephone recording system and keep the recordings as part of its records.

How long must these be kept? For the minimum period for which arbitration accepts investors' complaints — currently three years. But: where a dispute has been raised, the records must be kept till final resolution of the dispute; and if SEBI wants specific records preserved, they are kept till further intimation by SEBI.

Where the broker genuinely cannot produce the evidence (technical failure, for instance), other evidence such as post-trade confirmation by the client or receipt/payment of funds or securities by the client may be considered on merit.

Direct Market Access (DMA)

DMA lets a broker offer clients direct access to the exchange trading system through the broker's infrastructure without manual intervention by the broker. SEBI introduced it in 2008 and permitted institutional investors to use it. This is a favourite one-line question: DMA is for institutional clients, not retail.

Benefits listed by the workbook: direct client control over orders, faster execution, reduced risk of manual-entry errors, greater transparency, increased liquidity, lower impact cost for large orders, better audit trails, and better use of hedging and arbitrage through decision-support tools.

A SEBI-registered entity may act as investment manager for institutional clients and use DMA on their behalf. Brokers need prior permission from the stock exchange before offering DMA, and must specifically authorise each client after KYC and due diligence.

Algorithmic trading and HFT

Algorithmic trading is any order generated using automated execution logic. Automated trading means software that, once certain parameters are met, pushes buy/sell orders into the exchange system without manual entry of orders.

SEBI's circular of February 04, 2025 on safer participation of retail investors in algo trading sets the current position:

• For algo trading through APIs, the broker acts as the principal and the algo provider / fintech vendor acts as the broker's agent.
• Algos written by tech-savvy retail investors must be registered with the Exchange through their broker, but only if they exceed the specified orders-per-second (OPS) threshold.
• Brokers must build systems to detect and categorise all orders above the threshold as algo orders.
• Algo providers are not directly regulated by SEBI, but must be empanelled with the exchanges.

Other standing rules: all algorithmic orders must be routed through broker servers located in India; minimum order-level risk controls include price check, quantity limit check and order value check; a broker may offer algo trading only with the prior permission of the stock exchange; and the algo trading system must be system-audited every six months by a certified system auditor.

High Frequency Trading (HFT) is a type of algorithmic trading that is latency sensitive and is characterised by high daily portfolio turnover and a high order-to-trade ratio (OTR).

Step 2 — risk management and order routing (middle office)

An efficient risk management system is integral to an efficient settlement system. Internal risk controls serve four functions:

1. Protect the firm against market, credit, liquidity, operational and legal risks.
2. Protect the financial industry from systemic risk.
3. Protect the firm's customers from large non-market losses (firm failure, misappropriation, fraud).
4. Protect the firm and its franchise from reputational risk.

The broker must have an online risk management system (including upfront real-time risk management) for all orders. Pre-defined limits include order quantity and value limits, symbol-wise user order/quantity limits, user/branch order limits and order price limits. Only orders inside those parameters get pushed into the exchange trading engine.

Remember why this matters commercially: the obligation to settle trades lies with the broker. If a client defaults, the broker must still make good to the clearing corporation.

Step 3 — order matching

Order matching on an Exchange is done on a price-time priority basis. The rules:

• Price first. The best buy order is the one with the highest price; the best sell order is the one with the lowest price.
• Time second. Among orders at the same price, the one that entered the system first gets priority.
• Orders lying unmatched are passive orders. Orders arriving to match them are active orders.
• Orders are always matched at the passive order price.
• Quantity is not a factor in determining matching priority.

That fourth bullet is where marks are won and lost. If you send a buy limit at ₹807.65 and the best passive sell is ₹807.60, the trade happens at ₹807.60, not ₹807.65.

Step 4 — confirmation, and the contract note

Once matched, a trade confirmation goes to the broker, who tells the client through a contract note.

A contract note is the legal record of any transaction carried out on a stock exchange through a stockbroker. It is the confirmation of trades done on a day on behalf of a client, and it establishes a legally enforceable relationship between broker and client. Key rules:

• Issued within 24 hours of execution of the contract, in the format prescribed by Exchanges/SEBI.
• Uniquely and serially numbered, starting afresh from the beginning of the financial year.
• Carries the client's name, PAN and client code, plus order number, order entry time, trade number, trade time, quantity, rate/price.
• A contract note without consideration is null and void under the Indian Contract Act — so consideration must be shown separately.
• Must show all statutory charges (STT, GST, stamp duty), regulatory levies (SEBI turnover fees, exchange transaction charges) and brokerage separately.
• Must carry the broker's address, phone, email, fax, PAN and the name, telephone number and email of the compliance officer.
• Brokers must keep a duplicate copy or counterfoil.

Electronic Contract Notes (ECNs) go only to clients who opted for them. They must be digitally signed, encrypted, non-tamperable and IT Act 2000 compliant. The broker keeps the log report as proof of delivery and a bounce mail log. If an ECN bounces, the broker must send a physical copy within the stipulated time. In addition to email, the broker must publish the ECN on his designated website in a secured way.

Institutional trades — affirmation and confirmation

Institutional clients use a custodian, who is a clearing member of the Exchange. The broker assigns a trade to a custodian by entering the custodian participant (CP) code at the time of order entry. Once the custodian confirms, the clearing corporation assigns the obligation to the custodian. While confirming, the custodian verifies security details, side of the trade and price range as specified by the institutional client.

In 2004 SEBI mandated that all institutional trades on stock exchanges be processed through Straight Through Processing (STP) — electronically capturing and processing a transaction in one pass, from the point of first deal to final settlement, covering front, middle and back office and the general ledger.

Front office: bringing the client on board

Account opening documents

The client account opening form has two parts: the KYC form (basic information; uses the CERSAI template as Part I of the Account Opening Form) and a document capturing additional information — bank details, demat details, trading preference, past actions, nomination details.

The standard account opening kit contains six documents:

1. Client Account Opening Form (KYC part + additional information part).
2. Rights & Obligations of stock broker and client.
3. Uniform Risk Disclosure Document (RDD) for all segments/Exchanges.
4. Guidance Note — do's and don'ts for trading.
5. Document describing the broker's Policies and Procedures.
6. A tariff sheet specifying charges including brokerage.

Clients must also get the contact details of senior officials, in particular the compliance officer, and of the investor grievance cell of the stock exchange.

Any voluntary clause or document added by the broker is a non-mandatory document. It must not dilute the broker's responsibility or conflict with mandatory documents, rules, bye-laws, regulations or SEBI/Exchange circulars — any such clause stands null and void.

SARAL AOF is a simplified account opening form for new individual investors in the cash segment who do not want internet trading, margin trading, derivative trading or power of attorney. Such a client may submit only one documentary proof of address. PMLA, PML Rules and the AML Master Circular still apply.

KYC, IPV and the registries

PAN is the sole identification number for all participants in the securities market, irrespective of the amount of transactions. The broker verifies PAN online at the Income Tax website, without insisting on the original or a copy of the card. PAN becomes inoperative if not linked with Aadhaar.

Exempted from mandatory PAN: transactions on behalf of Central/State Government and by officials appointed by courts (official liquidator, court receiver); investors residing in the state of Sikkim; UN entities and multilateral agencies exempt from tax in India. For institutional clients (FPIs, MFs, VCFs, FVCIs, scheduled commercial banks, development financial institutions, SIDCs, IRDAI-registered insurers, public financial institutions), the custodian verifies the PAN against the original and gives certified copies.

In-Person Verification (IPV) is mandatory for all registered stock brokers. The name, designation, organisation, signature and date of the person doing IPV must be recorded on the KYC form. IPV done by one SEBI-registered intermediary can be relied on by another. A broker's Authorised Persons may also perform IPV. VIPV (Video In-Person Verification) is allowed through the broker's app — live environment, client clearly recognisable and not covering the face, random question and response, photograph matched with the Aadhaar-downloaded photograph, and stored in a tamper-proof, date-and-time-stamped form.

IPV is not required where the KYC was completed using Aadhaar authentication/verification of UIDAI, or where the KYC form was submitted online with documents provided through DigiLocker or another online-verifiable source.

KRA (KYC Registration Agency) — devised by SEBI in 2011 to centralise KYC records and avoid duplication across intermediaries. Clients whose KYC attributes cannot be verified by KRAs will not be allowed to transact further until verified.

CKYCR — the Central KYC Records Registry, run by CERSAI, set up under the SARFAESI Act 2002 and authorised under the PML Rules. Stock brokers shall, within 10 days after the commencement of an account-based relationship, file the electronic copy of the client's KYC records with the CKYCR. A unique KYC Identification Number (CKYC Number) is then generated and sent to the client by SMS/email.

Unique Client Code (UCC) — made mandatory by SEBI in 2001. It is the client's identity with the broker, must be mapped with the client's PAN, and must be given to the Exchange before entering into any trade. Exchanges validate UCC and PAN for all orders in both PRO and CLI markets at order entry. UCC is also mapped with the client's demat account.

Two more onboarding rules worth marks:

• A copy of all documents executed by the client shall be given to him free of charge within 7 days of execution, with acknowledgement taken.
• Brokers must upload a separate mobile number and email address for each client, and must never upload those of employees, remisiers or authorised persons. The same contact may be used for more than one client only on the client's specific written request, and only where the clients belong to one family, or the client is the authorised person of an HUF, corporate, partnership or trust.
• Where regulations require an investor to settle only by delivery, brokers may allot up to two trading client codes (one for buy, one for sell) so the legs are not netted. Both map to the same UCC.

PoA and DDPI

A Power of Attorney (PoA) authorises the broker to operate the client's demat and bank accounts for delivery of shares and pay-in/pay-out of funds. PoA is optional and must not be insisted upon. No broker or DP may deny services because a client refuses to execute a PoA — though internet-based trading is exempted from this clause.

PoA may allow transfer of funds only for settlement obligations, margin requirements, recovery of outstanding dues, obligations from other products bought through the same broker, and fees due. It must not allow off-market trades between unrelated parties, transfer of funds for trades executed through another broker, or opening a trading or demat account. A PoA must be in the name of the SEBI-registered entity only, never in the name of an employee or representative.

DDPI — Demat Debit and Pledge Instruction — is the newer, narrower document that serves the same purpose as a PoA and significantly mitigates the misuse of PoA. Its use is limited to exactly four things:

1. Transfer of securities towards exchange deliveries / settlement obligations from trades executed through the same stock broker.
2. Pledging / re-pledging of securities in favour of the TM/CM for the client's margin requirements.
3. Mutual fund transactions on stock exchange order entry platforms.
4. Tendering shares in open offers.

A client may instead settle using a physical DIS or eDIS. Existing PoAs remain valid until the client revokes them. Brokers must not compel a client to execute a DDPI or deny service for refusing. All off-market transfers need a signed physical or electronic DIS, plus the client's consent through OTP.

Running account

Settlement of funds shall be done within 24 hours of the payout, unless the client specifically authorises the broker to maintain a running account. That Running Account Authorisation must be signed by the client only and not by any PoA holder. Even with the authorisation, actual settlement of funds must be done at least once in a calendar quarter or month, depending on the client's preference.

Brokerage caps

Broker types: a full service broker charges higher commission; a discount broker charges much lower; online brokers cater to a niche retail segment at less than a broker-placed order would cost. Commission schemes may be volume based, slab wise or scrip wise, and can differ between day trades and delivery. SEBI requires brokerage details to be displayed on the order placement window of the IBT/WT application before the order is placed.

Order types — the vocabulary you must own

A. Price conditions

• Market order — buy or sell at the best available price across the market depth. No price is specified. Two variants: market order without protection (executes at whatever the best prices are) and market with protection (a hybrid of market and limit — it executes only up to a level specified by the trader, protecting against execution at any price).
• Limit order — the trader specifies the price: buy at or below, sell at or above. May not execute at all.
• Stop loss order — activates only when the market price reaches or crosses a threshold. Until then the order does not enter the market. The client enters two prices: a trigger price and a limit/market price. A buy stop loss triggers when the last traded price reaches or exceeds the trigger price.

B. Time conditions

Note: GTC and GTD orders are currently NOT available on the system as per SEBI directives.

C. Quantity conditions

• Disclosed Quantity (DQ) — discloses only part of the order to the market. An order of 1,000 with DQ 200 shows 200 at a time; each time it trades, another 200 is released.
• Minimum Fill (MF) — each trade must be for at least the stated minimum. An order of 1,000 with MF 200 means a maximum of 5 trades of 200 each, or one trade of 1,000.
• All or None (AON) — only the full order may be matched, possibly through multiple trades; otherwise it stays in the book.

Note: AON and MF orders are currently NOT available on the system as per SEBI directives.

Other conditions: Pro means the order is on the trading member's own account; Cli means it is on behalf of a client.

Proprietary trading: the pro-account facility through trading terminals is extended only at one location by default. For more than one location, the member must give the Exchange an undertaking stating the reason, and the Exchange decides case by case after due diligence. Every broker must disclose to a new client, at the time of entering into the KYC agreement, whether he does proprietary trading as well. A broker of an exchange cannot deal with brokers of the same exchange — for pro or for client trades — except with the prior permission of the exchange, and then with only one such broker. He may deal with only one broker of another exchange for proprietary trading, after intimating the name to his parent exchange.

Call auction: how an opening price is found

The call auction batches orders and executes them all at a single uniform price, unlike continuous matching. Phases: an order entry window (no trades, but the book is visible), then price determination, then execution at that one price.

The tie-breaking ladder is examinable:

1. The equilibrium price is the price at which the maximum volume can be matched.
2. If more than one price qualifies, take the price with minimum unmatched quantity.
3. If several prices tie on that too, take the price closest to the reference price (e.g. previous day's close).
4. If the reference price is the mid-value of a pair of prices closest to it, the reference price itself becomes the equilibrium price.

Order modification, cancellation and annulment

Orders can be modified or cancelled during trading hours and the pre-open stage as long as they are not fully executed. For a partly executed order, only the open, unexecuted part can be modified or cancelled.

Client code modification is allowed for non-institutional trades only to rectify a genuine error in the client code entered. Rules:

• Moving a trade to the broker's error account is not treated as a client code modification, provided the trades in the error account are subsequently liquidated in the market and not shifted to another code.
• Brokers must disclose their error account codes to the exchange and have a documented error policy approved by management.
• Exchanges levy a penalty, credited to the Investor Protection Fund, and may waive it where the broker proves a genuine error.
• Proprietary trades shall not be modified into client trades and vice versa.
• Modification between two institutional client codes is allowed without penalty only if both are different schemes/sub-accounts of or managed by the same institution. Between two unrelated institutional clients, penalty applies.

Trade annulment: the request must be submitted within 30 minutes from trade execution. The exchange may consider a later request, but no longer than 60 minutes, only in exceptional cases with reasons recorded. The application fee is 5% of the value of the trades, subject to a minimum of ₹1 lakh and a maximum of ₹10 lakh, credited to the Investor Protection Fund. Exchanges may raise the upper limit to discourage frivolous requests, and may examine trades for annulment suo moto.

Middle office: risks a broker faces

For each risk category the firm must establish standards and reports, impose position limits, set investment guidelines and strategies, report compliance with established policies and procedures, and assess the effectiveness of those strategies, policies and procedures.

Surveillance: intermediaries must have an internal code of conduct prohibiting staff from circulating unverified market rumours; access to social media and messaging platforms must be supervised with usage logs kept as official records; and market-related news must be approved by the Compliance Officer before forwarding — failing which both the employee and the officer face SEBI action. Brokers must maintain a formal Surveillance Policy. Exchanges run a Reversal Trade Cancellation Mechanism (RTCM) on an intraday basis to cancel non-genuine "reversal trades" designed to move profits/losses between parties or create artificial volume.

Back office: enrichment, allocation, accounts

Trade enrichment is the process of adding additional information to an instruction in a trade that is already being executed. It happens automatically after each trade execution. Back-office masters hold brokerage rates client-wise, GST, stamp duty and STT charge tables; when trade data is uploaded these are appended to every trade to produce client-wise brokerage, client-wise obligations for securities and funds, and all relevant tax amounts.

Trade allocation applies to institutional trades. The front office may enter a single order under CP code "INST" and the back office then distributes it across the client's various sub-schemes, using deal sheets from the front office. Allocation details must also be uploaded to the clearing corporation.

Books of account

Maintained under Rule 15 of the Securities Contracts (Regulation) Rules, 1957 and Regulation 15 of the SEBI (Stock Broker) Regulations, 2026. Brokers must keep separate books for each Stock Exchange, and within an exchange a separate set of client ledger accounts for each segment. Books are also maintained client-wise.

The books include the register of transactions (sauda book), clients ledger, general ledger, journals, cash book, bank pass book, securities register, counterfoils or duplicates of contract notes, margin deposit book, KYC and client account opening forms.

• Sauda book — every transaction effected: name of the security, value, rates gross and net of brokerage, client names.
• Client's ledger — all clients and their transactions through the broker.
• General ledger — general transactions: expenses, overheads, salaries, petty cash.
• Journal — the accounting book of the general ledger; adjustment entries such as interest receivable.
• Cash book and bank pass book — cash and cheque transactions, normally balanced daily.
• Margin deposit book — margins paid, collected, payable and collectable.

Under Regulation 16 of the SEBI (Stock Broker) Regulations, 2026, every stock broker shall preserve the books of account and other records maintained under Regulation 15 for a minimum period of eight years.

Brokers must keep records that distinguish moneys received from or on account of each client from moneys received and paid on the member's own account, and must ensure client collateral is not used for any purpose other than that client's margin requirements or pay-ins, with an audit trail.

Technology, continuity and cyber security

The broking system must be a fully integrated digital ecosystem covering back office, real-time order execution and risk control, with disaster recovery protocols and standby databases. SEBI mandates UAT and mock trading, with all test reports verified and certified by independent system auditors before software release. Core business activities and compliance functions must not be outsourced — an example of a core activity is execution of orders and monitoring of clients' trading activity.

Business Continuity Plan (BCP) / Disaster Recovery (DR): brokers with a minimum client base across exchanges, as specified by exchanges from time to time, shall mandatorily establish a business continuity/DR set-up, with a comprehensive BCP-DR policy document that is periodically reviewed and updated.

Technical glitch is defined precisely: any malfunction in a broker's electronic system — hardware, software, networks/bandwidth, processes, products or services, whether owned or outsourced — related to trading and risk management, occurring during a trading session, that leads to stoppage, slowdown or variance in functions such as log-in, order placement (modification, cancellation, execution, confirmation, status) or viewing of margin/collateral/funds, for a contiguous period of five minutes or more.

The framework applies to brokers offering IBT/STWT with more than 10,000 registered clients (excluding closed accounts) as on 31st March of the previous financial year. Timelines:

Exchanges also build an API-based Logging and Monitoring Mechanism (LAMA) with specified brokers.

Exchange outages: NSE and BSE act as alternative trading venues for each other. An affected exchange must notify SEBI and the alternative venue within 75 minutes of an outage, and the backup exchange must activate its BCP within 15 minutes of that intimation.

The Investor Risk Reduction Access (IRRA) platform was discontinued by SEBI's circular of March 27, 2026, replaced by the exchanges' Contingency Pool Trading facility, which lets brokers square off outstanding open positions for their clients during a disruption, using dedicated terminals inside the exchange premises.

CSCRF — Cyber Security and Cyber Resilience Framework, effective in phases from January 1, 2025, supersedes all previous SEBI cybersecurity guidelines. Cyber resilience is the ability to anticipate, withstand and recover from cyber-attacks. Its five resiliency goals are Anticipate, Withstand, Contain, Recover and Evolve, linked to six core functions: Governance, Identification, Protection, Detection, Response and Recovery.

Every entity needs a Security Operation Centre (SEC/SOC) — its own, a group-level facility, or a third-party managed provider. For smaller firms, NSE and BSE are mandated to set up Market SOCs (M-SOC) offering affordable cybersecurity.

CSCRF classifies regulated entities into five categories: MIIs, Qualified REs, Mid-size REs, Small-size REs and Self-certification REs.

Brokers with less than ₹1,000 crore clientele trading volume in a year AND less than 1,000 total registered clients are exempted from CSCRF.

Cloud framework (SEBI circular dated March 06, 2023): public cloud and community cloud are permitted subject to conditions. A private cloud is treated as an on-premise deployment, governed by the other SEBI circulars rather than this framework — so private cloud is permitted but not governed by the cloud framework. Hybrid cloud (a combination of two or more) is permitted subject to conditions. Any other model is prohibited unless explicitly permitted. A dedicated Hardware Security Module (HSM) is mandatory for MIIs and Qualified REs; mid-size, small-size and self-certification REs may implement any alternative based on a risk assessment approved by the Board / Partners / Proprietor.

Software vendor failure: brokers are advised to explore a software escrow arrangement, and large brokers should consider more than one software vendor to reduce single-point dependency.

Taxes and charges collected by the broker

Securities Transaction Tax (STT) is levied on every purchase or sale of listed securities — shares, derivatives, equity-oriented mutual fund units. The broker collects it from the client and remits it to the Stock Exchange / Clearing Corporation.

Physically settled stock derivatives (futures and options) attract the delivery rate of 0.1% from both the receiver and the giver of securities. STT is NOT applicable on currency derivatives, interest rate derivatives or debt securities. Exchanges give brokers an end-of-day report with total, member-wise and client-wise STT liability.

Exchange transaction charges are levied by exchanges on every trade, collected by brokers from clients and generally paid to exchanges monthly. In July 2024 SEBI mandated MIIs to use uniform transaction charges, eliminating volume-based slab discounts, so that charges are "true to label" for the end investor.

Stamp duty: the Finance Act 2019 amendments to the Indian Stamp Act, 1899 and the 2019 Rules came into effect from July 01, 2020. Stamp duty on securities is now collected at one place by one agency on one instrument, and shared with State Governments based on the state of domicile of the buyer.

SEBI turnover fees, collected by brokers and remitted through exchanges to SEBI monthly:

Bulk deals and block deals — do not mix these up

Bulk deal: any transaction in a scrip where the total quantity bought or sold is more than 0.5% of the number of equity shares of the company listed on the exchange. The 0.5% may be reached through one or more transactions during the day in the normal market segment. Disclosure by the broker:

• Single trade — immediately upon execution where the traded quantity on any single trade exceeds 0.5%.
• Cumulative trades for the day — within one hour from the closure of trading hours, where the day's purchases or sales under proprietary or any single client code exceed 0.5%.

Exchanges disseminate this to the public the same day after market hours.

Block deal: a trade with a minimum value of ₹25 crore executed through a single transaction on a separate block window, permitted by SEBI in September 2005 and revised on October 08, 2025.

Between 2.00 p.m. and 2.05 p.m. the exchanges calculate and disseminate the VWAP. If no trades occurred between 1.45 and 2.00 p.m., the VWAP from 9.00 a.m. to 1.45 p.m. (including pre-open/special pre-open trades) is used; failing that, the previous day's close.

Other block deal rules: orders may be placed at a price not exceeding +3% of the applicable reference price; the minimum order value is ₹25 crore; every trade must result in delivery and shall not be squared off or reversed; the broker discloses the deal with client information and the exchange publishes it the same day after market hours. The provisions also apply to the block deal window under the optional T+0 settlement cycle.

Trading sessions in the equity segment

Trade for Trade (TFT) segment: each trade settled separately, no netting, securities usually moved there by surveillance action, margin of 100%, price band mainly 2% / 5%.

SME platform: available on the cash market segment; SME securities distinctly identified; they may trade in the normal continuous market or have a daily liquidity window through a call auction; market making is mandatory for 3 years, with a separate trader workstation for the market maker; the market maker gives two-way quotes within a bid-ask spread; market lot of ₹1 lakh and in multiples of ₹1 lakh.

Offer for Sale (OFS) through stock exchanges: all investors registered with brokers other than the promoter(s) or promoter group may buy; where the offer is by a non-promoter shareholder, promoters may participate. Offer announced on T-1 day; non-retail investors bid on T day, retail investors on T+1 day. Institutional and non-institutional orders with 100% upfront margin may be modified or cancelled at any time; institutional orders without upfront margin cannot be modified or cancelled, except for an upward revision in price or quantity. Default in pay-in attracts a penalty of 10% of the order value, and the Settlement Guarantee Fund is not available for OFS.

Securities Lending and Borrowing Scheme (SLBS): a screen-based, anonymous order matching platform. Eligible securities are F&O securities, eligible non-F&O stocks and ETFs. Contracts are monthly, up to 12 months, with the second/reverse leg settling on the 1st Thursday of the respective series month. The lending fee is quoted per share. Retail investors, proprietary traders and institutional investors may participate, accessing the platform through Approved Intermediaries (AIs) via Clearing Members. Corporate actions and benefits remain with the lender, who is the actual owner. The Clearing Corporation gives a settlement guarantee supported by initial margin and daily mark-to-market. Security-wise position limits apply.

Beyond the book

The technical-glitch framework did not appear from nowhere. Indian brokers and exchanges have had highly public outages — the NSE trading halt of 24 February 2021, when the exchange stopped trading for nearly four hours, is the best-known example, and the tightening of outage reporting timelines and the creation of contingency trading arrangements followed that period. When you read the "75 minutes to notify, 15 minutes to activate" rule, that is the market's memory of a day when nobody could exit a position.