Sebi tweaks index trading limit rules

The Securities and Exchange Board of India (Sebi) has said the trading limits or circuit breakers for indices — the BSE Sensex and the NSE Nifty —would be calculated on a daily basis.

“The stock exchange, on a daily basis, shall translate the 10 per cent, 15 per cent and 20 per cent circuit breaker limits of market-wide index variation, based on the previous day's closing level of the index,” said Sebi in a circular.

Earlier, the circuit limits were calculated on a quarterly basis.

According to Sebi rules, trading is halted for one hour if the index moves 10 per cent in any direction. If the index moves 15 per cent, trading is halted for two hours and if the movement is of 20 per cent, trading is halted for the day.

Sebi has also said, after the trading halt, there would be a 15-minute pre-open ‘call auction’ session before trading can resume.

The trading halt would be reduced by 15 minutes to accommodate the ‘call auction’ process.