THIS IS VERY IMPORTANT
CIRCUIT FILTER NORMS
SEBI with an objective to restrict excessive price movements in the securities of listed companies had introduced daily price bands upto 20 % on the securities not having derivatives products. BSE as surveillance measure, reduces these price bands from 20 % to 10%, 10% to 5% and 5 % to 2 % based on the pre-decided joint criteria.
In order to enhance the market integrity and to prevent excessive price movement in the securities listed on its trading platform, BSE as a pre-emptive surveillance measure has an additional framework of periodic price bands in addition to the aforesaid daily price band framework. These additional periodic price bands shall be applicable to securities exclusively listed and traded on BSE Equity Trading Platform including securities listed on SME and SME ITP platform. The periodicity of these price band shall be weekly, monthly, quarterly and yearly and the same is as follows;
Securities with daily price band as
|
Weekly Price Band
|
Monthly Price Band
|
Quarterly Price Band
|
Yearly Price Band
|
20%
|
+/- 60 %
|
+/-100 %
|
+/-200 %
|
+/-400 %
|
10%
|
+/- 30 %
|
+/-60 %
|
+/-100 %
|
+/-200 %
|
5%
|
+/-20 %
|
+/-30 %
|
+/-60 %
|
+/-100 %
|
2%
|
+/-10 %
|
+/-20 %
|
+/-30 %
|
+/-50 %
|
In addition to the above, for monthly, quarterly and yearly limits a factor of 200 % of S & P BSE Midcap Index movement shall be applied for taking into account the overall movement in the market to the Monthly, Quarterly and Yearly price band limits. This factor shall be added in the direction of the movement of the index (rounded off to the nearest number) and the threshold of the opposite direction will remain unchanged.
Illustration: a security having applicable price band of 20 % can move upward or downward upto 20 % in single day. In a week it can move upward or downward upto 60 % whereas in a month it can move upward or downward upto 100 % and so on. Further, if the S & P BSE Midcap has moved up by 5 % in the month, then the upper limit of monthly price band shall be adjusted by 10% i.e. the upper monthly price band shall be 110 % whereas the lower price band shall remain as 100%.
In the event of any corporate action, the respective price of the security shall be adjusted as per the prescribed process.
The provisions of aforementioned framework shall come in effect from October 1, 2015.
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