Surveillance Measures

Price band (range) is lower limit and upper limit that the price of a share can go to in a particular trading session. To illustrate, a 10% price band (range) implies that the security can move +/- 10% of its previous day close price on any day. The downward revision is a daily process whereas upward revision, subject to satisfaction of criteria’s, is a bi-monthly process.

No price band is applicable to securities on which derivative products are available. However, set dynamic price band of 10% of the previous close price and shall be flexed based on pre-determined criteria.

Periodic review of movement of securities to/from Trade for Trade

The scrips in Trade for Trade segment are made available for trading under BE or BT series. The settlement of scrips available in this segment is done on a trade for trade basis and no netting off is allowed. These criteria for shifting scrips to/from Trade for Trade segment are decided jointly by all stock exchanges in consultation with SEBI and reviewed periodically.

With a view to rationalize the criteria of shifting of securities to/from Trade for Trade Segment and to bring it in line with the current market dynamics, SEBI and Stock Exchanges after deliberation and discussions have decided to revise the criteria and periodicity for trade for trade review

The process of identifying the securities moving to Trade to Trade is done on a fortnightly basis while securities moving to/from trade to trade are done on a quarterly basis.

SEBI vide their circular no. CIR /MRD/ DP/38/2013 dated December 19, 2013 had rationalised criteria for identifying Illiquid Scrips which shall trade in Periodic Call Auction and had provided the following criteria for identifying illiquid securities:

• Average daily turnover of less than Rs. 2 lakhs (calculated for previous two quarters)
• The scrip is classified as illiquid securities at all exchanges where it is traded

However, the scrips satisfying any of the following conditions are excluded

• Average market capitalization of more than Rs.10 crores
• Paying dividend in at least 2 out of last 3 years
• Profitable in at least 2 out of last 3 years and not more than 20% of promoters shareholding is pledged in the latest quarter and book value is 3 times or more than the face value.

Securities and Exchange Board of India (SEBI) and Exchanges in order to enhance market integrity and safeguard interest of investors, have been introducing various enhanced pre-emptive surveillance measures such as reduction in price band, periodic call auction and transfer of securities to Trade to Trade category from time to time. The main objective of these measures is to:

• alert and advice investors to be extra cautious while dealing in these securities and
• advice market participants to carry out necessary due diligence while dealing in these securities

Securities and Exchange Board of India (SEBI) and Exchanges in order to enhance market integrity and safeguard interest of investors, had introduced various pre-emptive surveillance measures such as reduction in price band, periodic call auction and transfer of securities to Trade for Trade segment from time to time.

In continuation to various surveillance measures already implemented, SEBI and Exchanges, pursuant to discussions in joint surveillance meetings, have decided that along with the aforesaid measures there shall be Additional Surveillance Measures (ASM) on securities with surveillance concerns based on objective parameters viz. Price variation, Volatility etc.

The shortlisting of securities for placing in ASM is based on an objective criteria as jointly decided by SEBI and Exchanges:

SEBI and Exchanges in a joint meeting have decided to introduce ESM framework for Micro-Small Companies (on main board with market cap less than 500 crores) with effect from June 05, 2023.

The criteria for selection of stocks in the Enhanced Surveillance Measure for Micro-Small Companies are mentioned in Exchange Circular no. MSE/SURV/13576 dated June 02, 2023. The same is reviewed and updated based on Joint discussion of Exchanges and SEBI, the current Surveillance actions under the Enhanced Surveillance Measures (ESM) are available in Exchange Circular no MSE/SURV/13823/2023 dated July 18, 2023.

Securities and Exchange Board of India (SEBI) and Exchanges in order to enhance market integrity and safeguard interest of investors, have been introducing various enhanced pre-emptive surveillance measures such as reduction in price band, periodic call auction and transfer of securities to Trade to Trade category from time to time.

In continuation to various surveillance measures already implemented, SEBI and Exchanges, pursuant to discussions in joint surveillance meetings, have decided that along with the aforesaid measures there shall be Surveillance Measures for Companies that are undergoing Insolvency Resolution Process (IRP) as per Insolvency and Bankruptcy Code (IBC) w.e.f. June 11, 2018.

Accordingly, the list of securities undergoing IRP as per IBC are mentioned in the annexure attached with circular.

The aforesaid securities shall be monitored on a pre-determined objective criteria and Margin shall be levied at the rate of 100 % once the criteria gets satisfied. These securities shall be further monitored for an objective criteria and shall be shifted to Trade for Trade segment once the criteria gets satisfied.

The complete list of applicable price bands across all groups of securities is published and updated by the Exchange on a periodic basis for reference by Members and investors.