BSE to introduce auto-cancellation of reversal trades soon

To ensure safety of the securities markets, top bourse BSE is planning to soon introduce a mechanism that will automatically cancel reversal trades executed on its platform.

'Auto-Cancellation of Reversal Trades' would focus on prevention of reversal trades on the exchange trading platform. In this measure, the second leg (latest leg) of a reversal trade shall be automatically cancelled by the exchange, BSE said in a statement today.

"The implementation plan of the said functionality shall be communicated shortly", it added.

Reversal of trade implies that for a buy transaction initially entered into by a broker for a particular client for a specific quantity, there is a corresponding sale transaction which takes place during the day for the same quantity between the same set of broker/clients and vice-versa.
 

Earlier, BSE had implemented self-trade prevention check (STPC) functionality and periodic price bands to curb manipulation in the capital markets.