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BSE phases out weekly, monthly price bands
To align the periodic price band mechanism with the new graded surveillance measures (GSM) framework, the BSE has decided to do away with weekly and monthly price limits for securities listed on its platform. After a gap of three days, the domestic bourses will reopen on Tuesday. Markets were closed on Monday on account of Holi festival.
Mumbai: To align the periodic price band mechanism with the new graded surveillance measures (GSM) framework, the BSE has decided to do away with weekly and monthly price limits for securities listed on its platform. After a gap of three days, the domestic bourses will reopen on Tuesday. Markets were closed on Monday on account of Holi festival.
The stock exchange will phase out the weekly price bands from March 20 and the monthly price bands from April 3 for companies that attract such periodic price limits. However, BSE will retain the quarterly and yearly periodic price limits.
To prevent excessive volatility in shares, BSE introduced long duration price bands in 2015 in addition to daily price bands, for stocks exclusively listed and traded on its platform.
The weekly, monthly, quarterly and annual price bands were devised to contain volatility in the prices of stocks across long period to ensure improved price formation and better regulatory oversight.
However, in a recent notice, BSE noted that the genesis to introduce periodic price bands was to create a rationalised and structured framework to promote and implement an orderly price discovery of securities on its trading platform.
With the recent formalisation and introduction of the GSM framework on February 23, 2017, a need has been felt to rationalise periodic price band framework implemented by the exchange to compliment GSM framework and to align the proactive measures taken by exchange, in a phased and orderly manner,” BSE added.
