Friction #16: Glitch-prone NSE is a repeat offender

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Editor's note: Technical glitches that bring stock exchanges to a grinding halt are supposed to be rare, once in a blue moon events. Right?  Not if you take into account the frequency with which they have been happening in the recent past at the National Stock Exchange—India’s largest in terms of total and average daily turnover of shares.  NSE has witnessed two major glitches and seven smaller ones in the last four years. This has led to questions being raised about its technical solidity as an institution. Yet, strangely, not once has the exchange mustered up the courage to disclose the loss it has caused investors. The technology powering exchanges is supposed to be robust because the trading systems involve millions of dollars changing hands electronically every second. So, for the world’s largest derivatives exchange (in terms of contracts), the latest technical glitch on 24 February, when trading was brought to a halt for three hours, was as costly as it was embarrassing. A Rs 1,000 crore investment on technology and related infrastructure provided by two respected companies—Tata Communications Ltd and Bharti …