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Stricter Surveillance Measures To Tackle Market Volatility To Continue: SEBI

The measures, which came into effect from March 23, will continue to be in force till May 28, Securities and Exchange Board of India (Sebi) said in a statement.

Apr 20, 2020 / 11:48 PM IST

Regulator Sebi on Monday said stricter surveillance measures to tackle market volatility amid coronavirus pandemic will continue till May 28. Besides, ensuring orderly trading and settlement, these steps are aimed at effective risk management, price discovery and maintenance of market integrity.

The measures, which came into effect from March 23, will continue to be in force till May 28, Securities and Exchange Board of India (Sebi) said in a statement.

Earlier these steps were in place for a month.

It further said Sebi and market infrastructure institutions - stock exchanges, clearing corporations and depositories are continuously monitoring the market developments and will take any further suitable actions as may be required.

"As the stock markets (both domestic and global) are expected to be volatile in the near future owing to concerns relating to COVID-19 pandemic and the resultant fear of economic slowdown, keeping in view the objective of ensuring orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity, it has been decided that the measures implemented since March 23, 2020 will continue to be in force till May 28, 2020," it added.

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Sebi had introduced various regulatory measures to deal with market volatility. These measures included revision in Market Wide Position Limit (MWPL).

For stocks in F&O segment meeting certain criteria, Market Wide Position Limit was revised to 50 per cent of the existing levels.

The margin for stocks meeting specific criteria would be increased, apart from having revised position limits in equity index derivatives (futures and options).

Dynamic price bands for F&O stocks could be flexed only after a cooling-off period of 15 minutes from the time of meeting the existing criteria specified by stock exchanges for flexing.

Since the implementation of these measures, Indian securities market has witnessed recovery in broad market indices. Further, there has not been any major disruption in stock exchanges, clearing corporations and depositories on account of the existing robust regulatory framework, Sebi noted.

"However, the expected volatility in the stock market still remains on the higher side," it added.

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PTI
first published: Apr 20, 2020 11:48 pm

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