Zerodha Has to pay compensation to a trader. The reason is that due to a technical glitch on the Zerodha platform, the trader suffered a loss and filed a compensation claim against the company. The trader has won this claim and now Zerodha is compensating him. According to the information received by Moneycontrol, Zerodha has so far paid Rs 8,225 to the trader as per the order received. It is being said that this decision will have a lot of importance in future in cases of technical glitches on the trading platform.
The trader had filed a compensation claim before the Grievance Redressal Committee (GRC) of BSE and the GRC ordered Zerodha to compensate the trader for the loss caused due to the technical glitch. The order is expected to open the door for other traders and may lead to more compensation claims being filed. However Zerodha has said in a blog post that this was completely wrong. Some of the GRC’s comments are clearly a mistake.
The matter is of 7th July
This incident happened on July 7, when a trader suffered a loss due to a technical glitch due to the usage of bandwidth at its maximum capacity. The same issue also surfaced on June 30, due to which traders were not able to close their positions at the end of the day. In the order, GRC claims that Zerodha is responsible for the loss caused to the trader (complainant). Therefore his claims are maintainable, that is, correct.
After the issue erupted on social media, Zerodha Chief Operating Officer Venu Madhav said that BSE never sent an alert on violation of 70 percent bandwidth utilization. He has termed GRC’s comment as a mistake. Madhav wrote in the blog post that the truth is that till date there is no system in place for members to actively track the bandwidth utilization during the day. On July 21, 2023, 14 days after the July 7 mega issue, the stock exchange issued a Circular 6 that reports will be sent via email to trading members to inform them about bandwidth utilization.
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Madhav claimed that when Zerodha finally received its bandwidth utilization report for June 30, none of the reports indicated any additional utilization. Madhav also said that the 4 Mbps leased line connecting Zerodha’s system to the exchanges cannot be compared with a broadband line. These leased lines are very episodic and only transmit compressed Exchange Protocol messages, which typically last only a few hundred bytes. Typically only a small percentage of such dedicated leased lines are used at any time.