2-hour BSE Star MF glitch disrupts thousands of mutual fund orders

Thousands of orders to buy and sell mutual fund units placed on BSE Ltd’s Star MF platform were disrupted on Tuesday, thanks to a glitch which lasted around two hours.

Star MF accounts for a large share of mutual fund orders coming from MF distributors as well as direct investment platforms like Groww and Kuvera. According to a person aware of the matter, around 475,000 transactions happen on the platform everyday on average.

The glitch came at an inopportune time for many mutual fund investors, when the stock market crash lured many investors to snap up mutual fund units. Kuvera CEO Gaurav Rastogi tweeted that the platform saw its highest daily order placements on Tuesday.

A Sebi registered investment advisor said on condition of anonymity that many client orders could not be executed on time due to the outage, leaving many investors unable to take advantage of the crash.

Equity orders must be placed before 3pm to get the same day’s net asset value. According to the advisor cited above, the outage lasted from around 1 pm to 3pm. Securities and Exchange Board of India this year stipulated that mutual fund units are to be allotted only when the purchase amount reaches the fund house. As a result, even a few hours of delay can push an order to next day.

“We received a few complaints from some members on the slowness of the response of MF star system today between 1230 pm and 130 pm. BSE Star MF system has more than 68,000 direct members. Most of the members were able to conduct their business normally throughout the day.BSE star MF is an order aggregation system which sends the data to RTAs at the end of the day and does not have the response time related criticality which equity and derivatives trading systems have with price time priority. All 17.83 lakh plus orders received today, highest ever, have been conveyed to respective AMCs/ RTAs,” said a spokesperson for BSE.