New add-on price band framework introduced by BSE

SEBI-BSE in action after a storm of rampant boom

(Commercial Representative) MUMBAI: In the name of surveillance and protection of investors' interests, the Securities and Exchange Board of India (SEBI) has been consulted with the Securities and Exchange Board of India The Bombay Stock Exchange (BSE) has since taken action to curb the rally. The large-scale offloading of small, mid-cap, cash stocks in the cash segment over the last two days, is actually responsible for the sell-off, the add-on price brand framework introduced by the Bombay Stock Exchange-BSE for BSE Exclusive Securities-stocks yesterday.

BSE introduces various surveillance measures such as Graded Surveillance Measures (GSM), Additional Surveillance Measures (LT-ASM), Short Term Additional Surveillance Measures (ST-ASM), Trade to Trade (TT) etc. in consultation with SEBI. J

Yesterday, BSE decided to introduce a new surveillance framework add-on price band framework to tighten surveillance measures for securities listed on special BSE trading platforms to control extraordinary fluctuations in stock prices and maintain market integrity.

Under this new framework, stock-securities will be differentiated based on the criteria set for this purpose in advance. In which the calendar period will be decided on the basis of last 3 months, one year, two years and three years.

The new framework will differentiate between shares subject to additional periodic price limits, weekly, monthly and quarterly price limits. This add-on price band will be applicable for these stocks in addition to the daily applicable price circuit limit in the separate assessment of such stocks.

In this new framework, the ratio of closed price ratios of securities and the ratio of add-on price bands will vary according to the slab of daily price bands applicable to securities. In which if the daily price fluctuation limit for a stock is 10 per cent and the closing price of the stock is Rs. That is, Rs. 5, while the monthly limit will be upper 1.4 i.e. Rs. 150 and lower 0.5 will be Rs. 20, while quarterly limit will be Rs. 8 i.e. Rs. 500 and lower 0.5 i.e. Rs. Will be 20.

Similarly, if the daily limit is 20%, for a stock with a closing price of Rs. And the lower limit will be Rs.50, while the quarterly limit will be upper ૩ i.e. Rs.500 and lower Rs.20.

Similarly, if the daily price band-price fluctuation limit of five per cent is applicable, the weekly upper limit will be 1.8 i.e. Rs.150 and the lower limit will be 0.50 i.e. Rs.30, while the monthly limit will be upper 1.8 i.e. 150 and the lower limit will be 0.2 i.e. Rs.

Apart from this, the upper limit for the quarter will be 1.2 i.e. Rs.150 and the lower 0.5 will be Rs.20 i.e. While for a stock with a daily price band of 2%, the weekly limit will be upper 1.1 i.e. Rs. That will be Rs.50 and quarterly upper limit will be 1.8 i.e. Rs.150 and lower limit will be 0.4 i.e. Rs.2.

The closing price of the stock on the previous day of the applicable date will be taken into consideration to determine this limit. The reference price for the weekly will take into account the closing price of the last trading day of the previous week, the closing price of the last trading day of the previous month of the calendar for the monthly and the closing price of the last trading day of the last quarter of the quarter.