SEBI measures to curb volatility

By Our Special Correspondent

MUMBAI, MARCH 5. The Securities and Exchange Board of India (SEBI) today announced that all the scrips in MCFS (modified carry forward system/ALBM (automatic lending and borrowing mechanism) and BLESS would attract additional margin at 10 per cent at the end of the day net outstanding sale position. This is a temporary measure and will be reviewed in due course.

These measures were taken after a meeting of stock exchanges in Mumbai today called by SEBI to review the current market situation. A press release issued by SEBI stated that exchanges have been advised to implement these measures immediately.

Further SEBI decided that the threshold limit for applicability of the volatility margin to be reduced from present 80 per cent to 60 per cent. The rates of volatility margin and other slabs will remain the same.

No exemptions to be allowed in the applicability of volatility margin to any class of investors. This means that the volatility margin will also be applicable to the positions of financial institutions, foreign institutional investors (FIIs), banks and mutual funds. This will be done on declaration basis till the required software changes are put in place by exchanges.

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Section  : Business
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