Flash crash: Sebi orders annulment
benchmark indices Sensex and Nifty move at least 10 per cent, there are no such mechanism to tackle any large-scale crash in other indices or
individual stocks.
In the past, there have been cases of large-scale sudden plunge in individual share prices, mostly due to high-speed latest technology trading systems, without any similar movements in the two key indices, the official said.
Since the 900-point Nifty flash crash, these issues are being actively discussed within Sebi and with the stock exchanges, among others. Sebi's International Advisory Board also discussed the matter at its meeting earlier this month.
It has been noted that market regulators across the world are currently facing technological challenges posed by High- Frequency Trades and Algo Trading, and a discussing ways in which regulatory authorities and stock exchanges can modify
market structures to tackle these issues.
The regulator has also asked the exchange to ensure compliance by the brokers to fair trading regulations and to be extra careful in their trades to avoid erroneous orders that may cause unusual movements in share prices.
Both the leading exchanges, BSE and NSE, are consequently seeking stricter adherence by their member brokers to compliance with the due diligence norms to avoid repeat of a situation similar to Nifty flash crash in October.
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