Leading stock exchange BSE has put in place ‘S+ Framework’ for enhanced monitoring of companies which are exclusively traded on its platform. The ‘S+ Framework’, which would be in addition to the existing surveillance measures, would also keep a check on shares which witness price rise not commensurate with their financial health and fundamentals like earnings, or witness spurt in volumes without any corporate event. Under ‘S+ Framework’, shares being settled on normal rolling basis will be placed in ‘SS’ group, while those being settled on trade to trade basis will come in ‘ST’ group, BSE said in a notice. Market participants dealing in securities identified under ‘S+ Framework’ would have to be extra cautious and diligent, the exchange said in a notice yesterday.
Among the additional restrictions being proposed under the latest surveillance measure are imposition of weekly, monthly price bands in addition to existing daily, quarterly, yearly price bands, imposition of very high transaction charges, and placing or continuing securities in trade to trade category. Also, there would be requirement of depositing additional amount as surveillance deposit, which would be retained for an extended period. According to the exchange, these actions would be triggered on the basis of certain criteria and would be “made effective with a very short notice”.
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“The members trading in the identified securities either on their own account or on behalf of clients shall be kept under close scrutiny by the exchange and any misconduct shall be viewed seriously,” BSE said. Markets regulator Sebi and the stock exchanges from time to time introduce various enhanced pre-emptive surveillance measures like reduction in price band, periodic call auction, transfer of securities to trade to trade category and GSM framework to “enhance market integrity and safeguard interest of investors”.