Sebi may issue framework on trade annulment
BS REPORTER
Mumbai, 12 October
Amid rising instances of 'freak trade' in the market, the Securities
and Exchange Board of India (Sebi) is planning to issue a framework on
the annulment of trade. However, the regulator might take the step
only after scenario-building, stress tests and consultations with all
market participants.
"We will work on a policy on trade annulment," Sebi chairman U K Sinha
said at a conference organised by the Federation of Indian Chambers of
Commerce and Industry. "It (rules on trade annulment) will take some
time. We want to be very cautious in whatever new structure we'll come
out with," he added.
On October 5, the benchmark Nifty index had recorded a sharp drop of
about 15 per cent, or 900 points, following erroneous trade orders
aggregating ~650 crore by domestic broking firm Emkay Global. This had
led to a temspeed trade, reconciliation between speed of trades, the
frequency of change in the index value, etc, he said.
On last week's 'freak trade, Sinha said, "Sebi has aprescription for
certain internal checks and balances at the broker and exchange
levels. We would like to check whether any such checks and balances
were violated." On whether there would any change in current
guidelines to curb such instances in the future, Sinha said, "One can
expect some measures in the foreseeable future and a host of other
measures after sometime."
Probing last week's Nifty crash for violations at broker, exchange
levels 'Action againstcompanies if 25% free floatrule notmet'
Companies that fail to meet the public shareholding deadline will have
to face severe consequences, Sebi chairman UK Sinha warned on Friday.
"Sebi will be conscious of the fact that the interest of the minority
shareholders in these companies are not being compromised. But I would
like to remind, consequences of non-compliance of the listing
agreement or any rule can be rather severe," he said at a FCCI capital
market conference in Mumbai. Sinha said even the finance ministry is
on board with it for not extending next year's deadline for achieving
the 25 per cent public shareholding requirement. Sinha said the
government, has assured it that public sector undertakings (PSU) will
be BS REPORTER
"Rules on trade annulment will take some time. We want to be
verycautious in whatevernew structure we'll come out with"
UK SINHA
Chairman, Securities and Exchange Board of India
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CS A RENGARAJAN,, B.Com ,FCS, LLB, PGDBM
Company Secretary, Chennai
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