A broker is not allowed to place orders on your behalf. A broker is allowed to exit your positions if your account is in debit/doesn't have sufficient balance, but not for any other reason.
You can register an e-complaint with NSE here.
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Complaints are made to the NSE or to the SEBI ? When to approach either of them or to both ?
Even if you approach SEBI, it gets directed to NSE/BSE. So best to raise it with NSE itself, especially for account-related issues. But if you think there is something which is more systemic, affecting a lot of customers, maybe then raise it with SEBI also.
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https://twitter.com/MaheshMNMS/status/1656239070497087488
This is technical error by Zerodha. Now, its hard to judge, if it can be classified as “trading without client permission”, but a case can be made. Zerodha refused to provide refund.
Seems very dangorous to me. Is there literally no way in India to trade/invest without the risk of losing all your money in trading account plus even more, even if you are not taking a risk?
To summarize his issue: He placed some orders two times but got rejected. But at 15:56 he finds out, Zerodha executed those orders via NSE and at the same time, told him, they were rejected. Please correct me, If i misunderstood.
Business idea: Start selling insurance that covers loss due to technical glitch, i will buy it.
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This is very dangerous. No broker is safe. Definitely complaint should be filed against Zerodha by the affected traders.
We’re looking into this. @KD61 @Stonecold
https://twitter.com/zerodhaonline/status/1656507742155055105?s=20
Please update the root cause once you find it, this type of glitch looks different and may have lot of downstream impact wrt other brokers too.
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Dear @Meher_Smaran @nithin
From what I understand, point to note in this issue is that the zerodha app showed an order as "rejected’
Then the customer placed an other order.
2nd time also same order also rejected.
Then 3rd time, the order was placed, which I believe was executed
AFTER MARKET HOURS, at roughly 15:50, zerodha app shows the “rejected” orders as "executed’
This is the issue
If there is a technical glitch and zerodha is down, then we can take counter positions in another account to reduce risk.
BUT IF ZERODHA SHOWS AN ORDER AS “REJECTED” AND THEN CONVENIENTLY UPDATES IT AS “EXECUTED”, then this is insane.
What are your customers expected to do?
How can we hedge ourselves against this?
DO clarify on this.
The resolution for this issue is important to me too, as a customer & active trader on zerodha since 2017.
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Whoa! This is extremely scary and unsettling, if true. When broker says order is rejected, client will always assume that the order did not get executed and will place the order again. If after market closes, the rejected order is shown as executed, intraday positions can become overnight positions and can potentially create huge losses, large enough to even wipe out entire capital
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We are writing a post explaining everything that happens behind the trading screen. There are a lot of misconceptions out there.
If the leased lines that connect us to the exchanges are having issues or generally issues with connectivity due to any reason, there are chances that when an order is placed, we don’t get the confirmation back from the exchange. No broker can say that they will not have these issues, as this isn’t really in the broker’s control. When the connectivity is stable, we typically do a reconciliation to ensure that all order status is updated. On this issue day, a couple of hundred orders were affected and we couldn’t reconcile (our daily average count is upwards of 10 million). We are still investigating why the status on these didn’t update and did only after market close on reconciliation.
But hopefully, you understand that some of these things are hard to control for anyone.
I think our team has already spoken about this customer and come to a settlement.
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Makes sense.
My suggestion is, the client should know the reason behind order rejection (in this case, “Zerodha didn’t get confirmation from the exchange”). This seems technically possible & easy to implement, unless you get false confirmation from the exchange. I am not sure, what message Kite showed to the client for the rejected order, as he did not mention it.
If you inform the client, the order got rejected because of some issue, then the client can decide & take the risk of placing future orders.
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Hi @nithin
Fair point that there are sometimes technical issues for most/all brokers.
I myself have experienced issues when orders did not go thru (shows validation pending) etc.
Once in a rare situation, I can live with this because I KNOW that the order did not go thru.
I emphasise that the platform cannot & MUST not show order status as “rejected” etc, when that’s not the case.
The order status reflecting as “rejected” indicates that the order was NOT executed for whatever reason (such as potential margin short fall due to this order, or whatever else)
But rejected order status never indicates to a trader that there is a connectivity issue!
(Atleast not to me. I too in this situation, would have placed the same order again!)
And here is the crux of the issue: Why was the order status updated to “rejected” if there’s was a connectivity issue?
If there’s a connectivity issue with leased line etc, order status can be ‘pending’ or ‘unknown’ or ‘delayed’ etc.
It must be clearly descriptive.
Then the trader is made aware of the issue, and can take corrective action if required.
But once the platform shows order status as executed/rejected/cancelled, then there shouldn’t be any change in order status later on.
Its understood that the aforementioned (or similar) order status are final in nature, as traders might take further action based upon such order status shown by the platform.
As a trader, I have to implicitly trust what the platform shows me, as I have no other option left!
Therefore, there can’t be two ways about it.
Kindly ensure the above issue is completely resolved in Zerodha.
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nse typically hasn’t acknowledged or released statements when they have been down in the past. Is there any way for us to know if errors are from nse/broker?
and I thought Zerodha discloses all the issues here (big or small): Zerodha transparency discloures
but this issue was not disclosed here, i request Zerodha to please do it, even if the issue had affected only 1 user. It will help us learn type of problems we can face in the future and be prepared.
Edit: Nithin sir always say, they are one event away from going bankrupt. I feel, the chances of that event being a “technical error” is more than a black swan market event. Thoughts?
I have one more question, Imagine, if a huge technical error happens in any top 5 brokers, is there a chance that NSE nullify that day’s trades for all clients, just to save big losses due to broker’s fault? Or NSE will never do it? I remember, London exchange nullified trades 1-2 years back, due to some reason which i forgot, it was related to commodity, if i remember.
Yes, I get what you are saying. In these cases, we cannot figure out the status until there is a reconciliation. Even with reconciliation, it isn’t foolproof. We are figuring out how to show better messages if something like this happens.
The issue typically happens with the connectivity to the exchanges, which the exchange outsources to various leased line service providers like Sify, Tata, Airtel, etc. Certain times it is due to the issue of the hardware provided by the exchange to the brokers to connect to the exchange.
We will explain all of this in the blogpost that we are working on publishing soon.
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Hmm… this affected less than a hundred users. Let me speak to our team on this. @MohammedFaisal + +
Bankruptcy is typically when a business is not able to return the money. So technically, we can’t go bankrupt as we don’t owe any money to anyone. We are a zero-debt business.
Our networth today is almost 30% of all customer funds put together. I don’t think there is any broker in the world close to that. So even if a black swan event is in the market or due to tech, it is almost impossible to see how our networth can go to 0.
But that said, tech is a risk and may be larger than the market risk for all intermediaries, exchanges, and depositories.
We have had these issues, but nothing has been nullified. A few years back, NSE NOW, the platform offered by NSE to many brokers, fired random customer orders. Nothing was nullified.
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Hi @nithin
Hope you’re well!
Wanted to know if there’s any update on the order status bug?
If yes, what changes are made?
Currently, there is no way around this. No quick fix. Whenever we go live with our in-house EMS, we should be able to ensure that we can clearly state reasons if orders are stuck for any reason.
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ETA Please
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ETA mentioned in other thread…
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