The Bombay Stock Exchange (BSE) has introduced a long-duration price band framework, complementing its existing daily price band mechanism. The new framework applies to securities exclusively listed on BSE platforms, including SME and SME ITP platforms.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Price band revisions
The daily price bands remain at 20 per cent, 10 per cent, 5 per cent, or 2 per cent, depending on pre-determined criteria. The long-duration framework allows:

  • 20 per cent band stocks: Movement up to 60 per cent weekly, 100 per cent monthly, 200 per cent quarterly, and 400 per cent annually.
  • 10 per cent band stocks: Movement up to 30 per cent weekly, 60 per cent monthly, 100 per cent quarterly, and 200 per cent annually.
  • 5 per cent band stocks: Movement up to 20 per cent weekly, 30 per cent monthly, 60 per cent quarterly, and 100 per cent annually.
  • 2 per cent band stocks: Movement up to 10 per cent weekly, 20 per cent monthly, 30 per cent quarterly, and 50 per cent annually.

This update aims to curb excessive volatility and ensure efficient risk management.

Changes in expiry dates for derivatives contracts
Effective January 1, 2025, BSE will revise the expiry dates for Sensex and Bankex contracts:

  • Sensex weekly expiry: Shifted from Friday to Tuesday.
  • Bankex monthly expiry: Changed to the last Tuesday of the month (previously, the last Monday of the first month).
  • Sensex monthly expiry: Moved to the last Tuesday of the month (previously, the last Friday of the first month).

SEBI's new interoperability rules
The Securities and Exchange Board of India (SEBI) has mandated true interoperability between exchanges:

  • In case of technical issues, BSE-listed shares can trade on NSE and vice versa.
  • Exchanges will maintain reserve lists for stocks listed on the other exchange.
  • Positions in derivatives and indices can now be offset, including for highly correlated indices, enabling better hedging.

Exchanges must notify counterpart exchanges of any issues within 75 minutes, ensuring market stability and continuity.

These updates highlight BSE’s focus on improving market efficiency and aligning with SEBI’s regulatory framework.