SEBI to formulate rules for cancelling errant trades

MUMBAI (Reuters) - The Securities and Exchange Board of India (SEBI) said on Wednesday it would unveil regulations for the cancellation or modification of trades arising from any instances of errant, or freak, trades on the country's stock exchanges.

The SEBI sought comments and suggestions from stock exchanges and other market participants on how best to regulate the aftermath of these errant trades.

India has experienced several instances of market glitches, including a flurry of erroneous orders placed by broker Emkay Global last October, that have rattled confidence in the trading systems of the country's exchanges.

Currently, India does not have any formal rules meant for dealing with the annulment of trades. Instead, stock exchanges devise their own guidelines.

Under SEBI's suggestions unveiled on Wednesday, trades which are once executed would not be annulled except under exceptional circumstances such as market manipulation or trading errors.

SEBI also provided some detailed guideline suggestions on how exchanges and market participants could deal with errant trades.

(Reporting by Himank Sharma; Editing by Sunil Nair)