SEBI Limits Technical Glitch Reporting Norms To Stockbrokers With Over 10,000 Clients

SEBI has revised its technical glitch reporting framework, limiting its applicability to larger stockbrokers and easing compliance for smaller firms.

In a circular issued on January 9, 2026, the Securities and Exchange Board of India said the rules apply when failures in electronic trading systems, such as login problems, order placement issues, or app outages, last for five minutes or more during market hours and disrupt trading.

The revised framework will apply only to stockbrokers with more than 10,000 registered clients, excluding closed accounts, as on March 31 of the previous financial year. The earlier framework issued in November 2022 applied to all stockbrokers, without any client-based threshold.

SEBI has clarified that several technical issues will not be treated as reportable glitches. These include global disruptions at cloud service providers or other technology platforms and technical issues at market infrastructure institutions. Problems during the processing of new trading accounts and back-office issues that do not affect trading or settlement have also been excluded. The same applies to payment gateway failures linked to banks or aggregators and issues in decision support tools such as technical charts or profit and loss statements.

The reporting process has been simplified. Brokers now have two hours to report a glitch after it occurs, instead of one hour earlier. All reports must be submitted through a single common portal, called Samuhik Prativedan Manch. If the T+1 deadline for a preliminary incident report falls on a trading holiday, it can be filed on the next trading day.

SEBI has also revised the penalty structure. Financial disincentives will not apply if a glitch affects only one trading mode, such as a mobile app, while another platform remains functional. Minor glitches with minimal operational impact have also been taken out of the penalty framework.

The circular also asks stock exchanges to review existing norms on capacity planning, software testing, and business continuity and disaster recovery, and to align them with the size of brokers and their dependence on technology.

The revised framework replaces the November 2022 circular and came into effect on January 9, 2026.