Sebi extends additional surveillance measure, trade-for-trade settlement to SME segment

They added that market participants may note that STASM framework and TFT framework will be in conjunction with all other prevailing surveillance measures.

The market regulator has extended the short-term additional surveillance measure (ASM) and trade-for-trade settlement framework to small and medium enterprises (SME) stocks, a ciruclar from the exchanges informed.

This revised frameworks will be made available by October 3.

Circulars issued by the exchanges stated that, as per Joint Surveillance Meeting of Exchanges and SEBI, the extant Short Term ASM (STASM) Framework and Trade for Trade (TFT) Framework will be extended to Small and Medium Enterprises (SME) stocks subject to certain changes.

They added that market participants may note that STASM framework and TFT framework will be in conjunction with all other prevailing surveillance measures being imposed by the exchanges from time to time. Further, it may also be noted that the shortlisting of securities under these two frameworks is purely on account of market surveillance, and it should not be construed as an adverse action against the concerned company / entity.

Earlier in the day, CNBC Awaaz had reported that this development was in the offing.

The report said that the market regulator was worried about the possibilities of stock-price manipulation in this segment, which has been seeing a lot of retail interest.

SME is a segment where the compliance requirements and regulatory oversight are less, and market cap and equity are small and therefore the segment is more prone to manipulation, said Yatin Mota, Associate Editor at CNBC Awaaz. Also, SME IPOs are approved by the exchanges and not by Sebi, added CNBC Awaaz’s Managing Editor Anuj Singhal, in a discussion with Mota.

“Keeping these in mind, Sebi has consulted the exchanges and, according to market sources, ASM and T2T measures that were applicable only to stocks on the mainboard will now be applicable to the SME segment as well,” said Mota.