On Jun. 20, IND SEBI revised call auction duration for IPO.
IND SEBI revised duration for call auction in pre-open session for IPO/ relisted scrips.
Follows IND SEBI Oct. 2023 issued master circular for stock exchanges, see #188261.
Background
During the call auction in pre-open session, orders were placed at higher price in large volumes and significant portion of the orders were cancelled just before session-ends.
This may have created false demand and supply and possibly price manipulations.
IND SEBI decided to modify the current provisions related to call auction session for IPO & relisted scrips and introduce additional surveillance measures at exchanges.
Amendments
Revise the duration of the session prescribed under para 17.2.1 of the master circular.
The session is from 9:00am to 10:00am; 45 minutes of which shall be allowed for order entry/modification/cancellation; 10 min for order matching/ trade confirmation.
The session shall close randomly during last ten minutes of order entry, i.e., anytime between 35th and 45th minute of the order entry window; it shall be system-driven.
Specifies additional surveillance mechanisms for exchanges to avoid manipulations.
Stock exchanges shall provide a report to SEBI by end of day regarding any alerts.
Details of number and quantity of cancelled orders shall be disclosed for transparency.
Effectiveness
The circular's provisions shall be applicable from 90th day of its issue date (Sep. 18).
