Sebi to guard investors from stock crash
Market regulator Sebi today said it will soon announce measures to protect investors against stock crashes on the bourses.
Last month, the National Stock Exchange (NSE) witnessed flash crash', when the Mumbai-based brokerage Emkay Global Financial Services sent the exchange index tumbling as much as 15.5 per cent in just a few seconds, creating a panic among traders.
The crash was the result of erroneous trades worth USD 126 million, placed by Emkay Global.
"We are going to take some measures so that there is some pre-check in orders, in pricing and there are some other checks also introduced. We are looking at avoiding similar incidents," Securities and Exchange Board of India (Sebi) Chairman U K Sinha told reporters on the sidelines of a securities market conference here.
"We are going to announce some measures based on experts views. Lapses on part of any intermediaries will be looked at separately and actions will be taken," Sinha said.
He assured the regulator is acting on both the fronts – systematic improvement and action for lapses.
Commenting on regulator's decision to discontinue mini-derivatives contracts, Sebi Chairman Sinha said as a measure of experiment, Sebi allowed mini derivatives contracts, but data show that trading in mini contacts constitute only a minuscule and it was felt that there might be certain amount of misuse and mis-selling happening in those contracts.
"Therefore, as a measure to provide safety to small investors we have taken the decision to discontinue mini contracts," Sinha said.
Derivatives contracts first started
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