The goal of Sebi’s most recent move is to safeguard investors’ interests and stop instances of price manipulation brought on by the fabrication of supply and demand.
SEBI Adjusts IPO and Relisted Scrip Pre-Open Call Auction Length
With effect from September 18, 2024, capital market regulator Sebi on Thursday announced significant modifications to the regulations governing call auctions in the pre-open session for initial public offerings (IPOs) and relisted equities. The action is intended to safeguard investors’ interests and stop instances of price manipulation brought on by the fabrication of supply and demand. On February 10, 2023, stock 24 news broke the story of the possible regulation changes.
According to the circular, Sebi has notified the following significant changes:
Rules of session, SEBI Adjusts IPO and Relisted Scrip Pre-Open
Rules for pre-session call auctions will be modified with more exchange monitoring
Pre-opening will take place between 9 and 10 am for 60 minutes.
From 9 a.m. until 9:45 a.m., orders may be placed, changed, or cancelled.
Random session closure determined by the system will occur between 9:35 and 9:45 in the morning.
Order matching and confirmation will occur throughout the following ten minutes, from 9:45 to 9:55.
The final five minutes (9:55–10 am) will serve as a buffer to help with the changeover from pre-opening to regular trading.
Real-time notifications of canceled orders will be displayed on exchange websites and broker terminals.
Alerts will be generated by stock exchanges depending on the following indicative parameters:
During the pre-opening session, the cancelled amount for a specific client surpasses 5% of the overall cancelled quantity throughout the market.
- During the pre-opening session, the value of the cancelled quantity for a specific client surpasses 5% of the entire value of the cancelled quantity throughout the market.
- A client’s cancelled quantity surpasses 50% of the total amount that client placed during the pre-opening session.
- For a certain client, the value of the cancelled quantity surpasses 50% of the entire value of the quantity that client put during the pre-opening session.
- The pricing have changed considerably from the order that was placed before.
- Additional parameters can also be set by stock exchanges to generate notifications.
- By the conclusion of the day, stock exchanges are required to submit a report to Sebi. Based on their study, the exchanges will ask clients to explain any cancellations or revisions.
- Why are there new regulations?
- According to Sebi, it was noted that orders were placed in bulk at higher prices during the call auction in the pre-opening session for some IPOs and relisted scrips, and a sizable percentage of these orders were canceled just before the call auction session ended.
Account opning link:
- Groww Account- https://app.groww.in/v3cO/kyrp1zph
- Kotak neo Account https://kotaksecurities.ref-r.com/c/i/32531/109103906
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