BSE to have PAN-based self trade prevention checks in equities

It has asked its trading members to verify PAN details of clients registered in the exchange's UCC

Top bourse BSE has decided to conduct self-trade prevention checks based on Permanent Account Number (PAN) of investors trading on its equity platform as well as currency derivative segment, from October 12.

Currently, self-trade prevention check prevents matching between a buy and a sell order entered in the same order book by a member for the same client code.

Accordingly, as an "enhancement" to the existing mechanism, BSE said it will "perform the self-trade prevention check based on PAN of clients."

"Using the PAN details available in the exchange records, the check shall help prevent matching between a buy and a sell order of a client placed by different members in the same order book," the exchange said in two separate notices today.

BSE has asked its trading members to verify PAN details of clients registered in the exchange's UCC (Unique Client Code) system.

The bourse also said that it would conduct a market-wide mock trading session in the live environment on Saturday, to facilitate the roll-out.

PAN-based self-trade prevention checks were introduced by BSE in its equity derivative segment last month.

Self-trades do not result in change of ownership as the buyer and the seller are the same.

Capital market regulator Sebi takes action against those entities that indulge in these activities with malafide intent under its 'Prohibition of Fraudulent and Unfair Trade Practices' norms.

NSE will also introduce the mechanism in the capital market segment with effect from October 12.