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SEBI takes measures to prevent stock market turmoil, changes in rules including short selling

  • Starting March 23, new changes will be applicable for one month
  • Open limit of share deals in futures and options segment also changed


The Security and Exchange Board of India (SEBI) on Friday introduced new measures to rein in the massive turmoil in the market and to ensure orderly trading and settlement. These measures include changes in the open range of share deals in the futures and options segment. Apart from this, measures have also been taken to make the system flexible according to the demand fluctuations.

New measures implemented from 23 March
SEBI said in a statement that these measures will come into force from 23 March and will remain in operation for a month. These steps will curb short selling in the market and will also reduce volatility in individual stocks. When investors sell a stock at a higher price and then buy it at a lower price to make a profit, it is called short selling. SEBI has taken these measures at a time when markets are going through a period of great turmoil in anticipation of economic losses from the epidemic caused by the corona virus. The epidemic is also affecting economic activities at this time.

Decrease in market based limits will increase the period
JAMIT Modi, founder and CEO of SAMCO Securities, said that the market-based limit has been reduced, which means that more shares will now be in the range of futures and options trading. He said that apart from this there is a limit of 500 crores for short selling which has been removed. Now if someone wants to cross the Rs 500 crore limit, then his twofold margin will be tied for three months. In practice, this is similar to the additional measures taken to monitor the stock market a few years ago.

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Increased limit of open shares deals in derivatives segment
Taking cognizance of the continuing unusual situation in the market, Sebi said that it has discussed with the stock markets, clearing corporation and depositories about the steps to be taken in the current situation. SEBI said that these measures also include increasing the available limit of open-share transactions in the derivatives segment to 50 per cent. Currently, this limit in the derivatives segment is equivalent to 20 percent of the total market capitalization. In addition, the margin will be increased for shares that meet specific eligibility.

We will take more steps if needed
SEBI said that SEBI and the stock market will continuously monitor the situation and review the situation. If necessary, further steps will also be taken. Let us tell you that the market is currently undergoing an upheaval due to the possibility of economic effects of Corona virus infection. In the past five trading sessions, domestic stock markets have closed in four sessions. However, on Friday, the Sensex closed at 29915.96 points, up by 1627.73 points.

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