Technical Glitch At NSDL Delays Settlement Of Some Equity Trades

A technical disruption at National Securities Depository Ltd. (NSDL) delayed the settlement of certain equity trades executed earlier this week, affecting the credit of shares to investor accounts, according to brokerage communication and statements cited by Bloomberg.

Share Credits Pending For Tuesday And Wednesday Trades

The credit of shares purchased on Tuesday and Wednesday remained pending due to issues in inter-depository functions, according to a client notice dated Thursday issued by Nirmal Bang Securities Ltd. and reviewed by Bloomberg. The brokerage informed clients that the delay originated from a technical issue at NSDL.

Separately, several customers and brokers said that shares from trades executed on Wednesday had not yet been reflected in their demat accounts, according to people familiar with the situation cited by Bloomberg.

Normal Settlement Timelines

According to NSE Clearing Ltd.’s website, shares purchased in the equity market are typically credited to buyers’ demat accounts by 10:30 a.m. local time on the settlement day following the trade. For sales transactions, shares are usually debited from sellers’ accounts by 3:30 p.m. on the following day.

The delayed settlements meant that these standard timelines were not met for some transactions linked to NSDL during the affected period.

NSDL Confirms Technical Disruption

NSDL Chief Executive Officer Vijay Chandok confirmed that the depository had experienced a technical snag and said remedial steps were underway. In response to a query from Bloomberg, Chandok said NSDL had activated its back-up servers and that most of the issues were being resolved.

“It is just a matter of a few minutes before systems are fully functional,” Chandok told Bloomberg.

In a separate acknowledgement issued on Wednesday, NSDL stated that some of its services had been briefly disrupted due to a technical issue. The depository did not specify the number of accounts or transactions affected.

Market Reaction And Broader Context

Shares of NSDL traded 1.4% lower at 1:46 p.m. local time following reports of the settlement delays, according to Bloomberg data. India’s equity market, valued at about $5.2 trillion, has experienced technical disruptions in the past. In 2021, the National Stock Exchange of India Ltd. experienced a serious systems failure that resulted in a halt in trading for several hours, which was the longest trading disruption in the exchange’s history, as disclosed by NSE.

NSDL is India’s second-largest securities depository and plays a critical role in the settlement of equity and debt market transactions. The depository said system restoration efforts were continuing to ensure normal settlement operations.