Sebi cracks down on pseudo buy and sell orders designed to deceive

Exchanges announce curbs to reduce trade orders aimed at manipulating the market; serial offenders could face trading disablement of up to two hours

The Securities and Exchange Board of India (Sebi) has trained its guns on ‘spoofing’ and ‘quote stuffing’—stock market jargon for pseudo buy or sell orders aimed at deceiving other traders.

Stock exchanges have put in place a new order-level surveillance mechanism to deter such practices. Under the new guidelines, serial offenders could face trading disablement ranging between 15 minutes and two hours.

“There shall be an additional order based surveillance measure to deter persistent noise creators, that is excessive order modifications and cancellations with an intent to avoid execution,” NSE has said in a circular dated March 26.

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