Based on the representation made by Association of Mutual Funds of India (Amfi), Sebi has replaced the definition of thinly traded debt security by a new paragraph in which the maximum level for qualifying for thinly traded debt security has been hiked to Rs 15 crore for a period of thirty days prior to the valuation date.

Sebi modified the definition by adding an example to clarify that scrip should satisfy both the maximum limits in terms of volume and value of trades in a month, according to a latest circular on the issue.

The paragraph reads: For example, If the volume of trade is 1 lakh and value is Rs 4 lakh, the shares does not qualify as thinly traded. Also, if the volume traded is 40,000, but the value of trades is Rs 6 lakh, the share does not qualify as thinly traded.

Further the regulator has clarified that in order to determine whether a security (debt/equity) is thinly traded or not, the volumes traded in all recognised stock exchanges in India could be taken into account.

The valuation method for government securities not traded for more than 30 days or one which would qualify as a thinly traded security is now deleted. Such securities would be valued at yield-to-maturity based on the prevailing market rate.