BSE cautions members from trading in unrealistic prices

Trading members of the Bombay Stock Exchange were cautioned by the authorities regarding trading in unrealistic prices of stocks that are relisted in the markets.

The members should be aware that as per the prevalent policy, on the opening day of trading of the scrips post revocation of suspension after more than one year of suspension, merger, de-merger, amalgamation, capital reduction, scheme of arrangement, direct listing on another stock exchange while being listed on one Exchange and new listing, there are no price bands, in order to allow the market to discover the price of the scrip.

However, it has been observed that some trading members are misusing the system by placing orders at unrealistic prices, which is not in line with the fundamentals of the company. In the past, trading members had been warned against such misuse of the system, whenever price bands were kept open. Placing orders at unrealistic prices may lead to displaying a false and misleading market condition.

Trading members are hereby, once again advised to refrain from such undesirable practices and ensure that none of their traders indulge in such acts. Any casual explanation like punching error / operator error will not be acceptable.

The Exchange will take a very serious view of the matter and will initiate Disciplinary Action including suspension / expulsion of membership rights in such cases. Members are also advised to inform their sub-brokers / employees, etc. of the seriousness of the matter and to refrain from placing such orders in future.

Source : Equity Bulls

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