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The stock exchange clarified that its new add-on surveillance measures that sought to limit movement in stock prices beyond their price-band limit on a weekly, monthly and quarterly basis is limited only to X, XT, Z, ZP, ZY, Y group shares exclusively listed on the BSE.
Further, the new surveillance measure will be applicable only on securities worth Rs 20 or above and having a market capitalization of less than Rs 1,000 crore.
In the circular issued by the stock exchange on Monday evening, there was no mention of the stock groups on which the surveillance rule will be applicable nor the market capitalization criteria.
BSE said that its move is aimed at maintaining market integrity and curbing excessive price movement, which led investors to believe that the stock exchanges was trying to temper with market direction. The Nifty Smallcap 100 index fell as much as 5 per cent in two sessions while the Nifty Midcap 100 gave up close to 3 per cent of its value.
The stock exchange said that the criteria for shortlisting of stock under the new surveillance will be a 6-fold price increase in the past six months, 12-fold in past one-year, 20-fold in past two years and 30 fold in past three years.
BSE has now clarified that instead of the weekly, monthly and quarterly price limits that the exchange had proposed in its previous circular, stocks shortlisted on the basis of the new criteria will have six-monthly, one-yearly, two-yearly and three-yearly price bands beyond their daily price limits.
“Also, it may be noted that the shortlisting of securities under aforesaid framework is purely on account of market surveillance and it should not be construed as an adverse action against the concerned company,” BSE said.
Following the clarification from BSE, the Nifty Smallcap 100 and Nifty Midcap 100 index recouped most of their losses but were still in the red. The Nifty Smallcap 100 was down 1 per cent and Nifty Midcap 100 was lower by 0.5 per cent.
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