NSE to go for graded surveillance of shares whose prices do not reflect performance

to give protection to investors from the perils of trading in scrips where the upward push in price is not commensurate with their financial efficiency and business fundamentals, the nationwide stock change (NSE) will shortly introduce graded surveillance measures.

this means, scrips whose prices upward thrust abnormally despite symptoms akin to earnings, ebook value, mounted assets, internet value, and worth/earnings a couple of no longer reflecting sufficient reasons for that upward thrust, can be subject to a higher degree of surveillance.

extra restrictions similar to placing/continuing such scrips in the alternate-to-alternate phase, asking for added cash as surveillance deposit, buying and selling as soon as every week/month, in addition to freezing the fee on the higher facet could be carried out, according to a decision taken at a joint surveillance meeting of exchanges with SEBI.

The NSE said it could one at a time inform market individuals by using publishing a listing of such shares and the graded surveillance measures would begin a week after the listing is out. the method of picking out and reviewing of these scrips/securities could be finished twice a year.

Modus operandi

A six-stage surveillance motion has been envisaged for these shares. within the first stage, the scrip would be transferred to the trade-to-change section with a value band of 5 per cent or decrease.

as soon as moved into this section, intra-day buying and selling within the scrip cannot happen; it must be delivered for T+2 settlement compulsorily.

in the 2nd stage, an extra surveillance deposit (ASD) of one hundred per cent of the scrip price can be levied on the consumer of the scrip over and above the existing collateral margins. The scrip would stay within the change-to-exchange section with a cost band of 5 per cent or lower.

the following stage would permit trading once per week (every Monday) in addition to the a hundred per cent ASD. And, within the subsequent stage, whereas buying and selling shall be authorised weekly, the ASD can be doubled to 200 per cent.

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