SEBI Extends Surveillance and Trade-for-Trade Settlement to SMEs
Introduction:
In a recent circular issued by the stock exchanges, the Securities and Exchange Board of India (SEBI) has announced its decision to extend the trade-for-trade settlement framework and short-term additional surveillance measure (ASM) to include small and medium enterprises (SME) stocks. This move is aimed at addressing concerns regarding stock price manipulation in SME stocks. This article delves into the details, providing insights into the purpose, implementation timeline, and implications of this decision.
Extending the Surveillance Framework to SMEs:
Based on the Joint Surveillance Meeting of Exchanges and SEBI, the existing Trade for Trade (TFT) and ASM framework will be extended to SME stocks. The extension is subject to specific changes that are yet to be disclosed. This measure aims to enhance market oversight and mitigate potential risks associated with stock price manipulation.
Curbing Stock Price Manipulation:
Brokers and market participants have acknowledged that the inclusion of SME stocks within the trade-for-trade settlement framework and surveillance measure is a significant step toward curbing stock price manipulation. By implementing these measures, SEBI aims to ensure fair and transparent trading practices in the SME segment.
Implementation Timeline and Compliance:
The revised framework and surveillance measures are scheduled to be implemented by October 3. Market participants are advised to note that the TFT and ASM framework will work in conjunction with other existing surveillance measures imposed by the exchanges. This emphasizes the importance of complying with all the required regulations to maintain market integrity.
Conclusion:
SEBI’s decision to extend surveillance and trade-for-trade settlement to SMEs reflects its commitment to maintaining a level playing field in the stock market. By curbing stock price manipulation, these measures seek to safeguard the interests of investors and promote a fair and transparent trading environment. Market participants should familiarize themselves with the revised framework and ensure compliance to foster a robust and trustworthy SME market.
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