Wednesday, February 20, 2013

Trading in illiquid shares only thru periodic call auction: SEBI

Courtesy :Business Line

Effective April 1, illiquid stocks would be traded only through the periodic call auction mechanism on stock exchanges instead of the existing order-driven system in the normal market, said SEBI.
Market regulator’s decision was based on the recommendations of its Secondary Market Advisory Committee (SMAC).
Call auction in these stocks would be done every one hour starting 9.30 a.m. on each trading day, said SEBI.
Once this is implemented, trading in illiquid scrips would be done through three distinct activities. The first activity includes order entry, order modification and order cancellation of 45 minutes duration. The second activity is for order matching and trade confirmation and would last for eight minutes.
The final seven minutes would be a buffer period for closing the current session and facilitating the transition to next session taking the total time for the call auction session to one hour. The first session would be randomly closed during last one minute of order entry between the 44th and 45th minute. This would be system driven.
SEBI said stocks having an average daily trading volume of less than 10,000 shares with the average daily number of trades of less than 50 and classified as illiquid by all stock exchanges (where the scrip had been listed) as criteria for illiquidity.
Exchanges have to review illiquid criteria of scrips at the start of every quarter.
These scrips can exit from the call auction mechanism to the normal trading if they have remained in session for at least two quarters and are not illiquid.
SEBI has mandated a price band of 20 per cent for illiquid scrips.
All unmatched orders at the end of an auction session would be purged, and in case the market wide index circuit-breaker is triggered, the session would be cancelled and all orders purged, said SEBI.
If the lowest selling price entered is less than or equal to the maximum buy price entered into by the same entity results into a trade, the regulator will impose a penalty on a daily basis and credit the investor protection fund.
SEBI has also decided to implement the pre-open call auction session in all exchanges with active trading and to all liquid scrips.


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19 comments :

  1. Dear VP, Whats your view on transgene biotech. Can it get back or better to forget the company?

    ReplyDelete
    Replies
    1. No faith in Transgene and its management

      Delete
  2. sir,,
    you recommended opto around 170. now it is at 59.


    can one buy this share now for long term

    your valued view please.

    kindly write in your blog about opto about its future prospect.. is it a value buy at cmp?

    thanks

    ReplyDelete
  3. For the last one month ,at least three times I mentioned my current stand on opto, as reply for other's queries.

    ReplyDelete
    Replies
    1. your view on DENORA INDIA Results..?

      Delete
  4. Hi VP Sir,

    In capital goods sector, which stocks would you prefer? I can wait for 2-3 years and am not averse to buy large-cap stocks.

    ReplyDelete
    Replies
    1. Stocks like TIL,TRF..etc can be considered.Thermax is good at lower level,but should remember the order book of all these companies are at lower level now and one should willing to wait for some long term with patience for good return.

      Delete
  5. Sir, but the search option is still not working. So, it has become tough for us to really search anything and see when did you make a last comment:(
    Hope blogger's team fix it soon.
    Its really frustrating.

    ReplyDelete
  6. Whats your view on KS Oils & Ruchi strips & alloys?

    ReplyDelete
  7. Whats your view on sterling biotech & Nectar life science at CMP?

    ReplyDelete
  8. Whats your view on surya pharma & twilight litika pharma and bilpower for next one year?

    ReplyDelete
    Replies
    1. Not tracking Nectar,all others can be considered as only punter stocks

      Delete
  9. Dear sir,
    What is your view on Advanta india at present price.As it is showing continuous drop in debt,can we buy more.
    regards
    abhishek

    ReplyDelete
    Replies
    1. Advanta India recommended @ Rs.390 level For low risk takers , it is the time to book partial profit and recover cost.

      Delete
  10. Dear VP sir, Can you please give your views on Jayshree Tea and industries a birla group company ?

    regards

    Sanjeev jain

    ReplyDelete
  11. ur views on orient bell ceramics . sell, buy or hold

    ReplyDelete

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