Measures to contain high volatility in market to be in force till August 27: Sebi

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Published: July 21, 2020 7:33 PM

Dynamic price bands for F&O stocks can be flexed only after a cooling-off period of 15 minutes from the time of meeting the existing criteria specified by stock exchanges for flexing, Sebi had added.

On review of COVID-19 pandemic related situation, it has been decided that the regulatory measures introduced on March 20, 2020.

Capital markets regulator Sebi on Tuesday said stricter surveillance measures to tackle market volatility amid coronavirus pandemic will continue till August 27. On March 20, the regulator had come out with various measures, including revision of market wide position limit, to ensure orderly trading and settlement to contain high market volatility.

Besides, ensuring orderly trading and settlement, these steps were aimed at effective risk management, price discovery and maintenance of market integrity. On review of COVID-19 pandemic related situation, it has been decided that the regulatory measures introduced on March 20, 2020, shall continue to be in force till August 27, 2020, Securities and Exchange Board of India (Sebi) said in a statement.

It, further, said stock exchanges and clearing corporations will be issuing necessary instructions to market participants in this regard. Sebi, in March, had introduced various regulatory measures to deal with market volatility.

These measures, which came into effect from March 23, included revision in Market Wide Position Limit (MWPL).
For stocks in F&O segment meeting certain criteria, MWPL might be revised to 50 per cent of the existing levels, it had said.

The margin for stocks meeting specific criteria was increased, while position limits in equity index derivatives (futures and options) were revised. Dynamic price bands for F&O stocks can be flexed only after a cooling-off period of 15 minutes from the time of meeting the existing criteria specified by stock exchanges for flexing, Sebi had added.
Increase in margin for non-F&O stocks in cash market was also announced subject to certain conditions.

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