NSE notified regarding the Pre-Trade risk controls - Market Price Protection

Jan 25, 2023 | by TeamLease RegTech Legal Research Team

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Secretarial ComplianceThe National Stock Exchange (NSE) on January 24, 2023, issued a notification regarding Pre-Trade risk controls - Market Price Protection.

The following has been stated with respect to the handling of Market Orders namely: -

• Revised handling of ‘Market’ price orders with book type RL and time conditions as Day/IOC – 

1. Shall be applicable to all Futures and Options contracts in the Commodity derivatives segment

a. ‘Market’ price orders shall not be allowed in a contract that has not traded for the day i.e. LTP is not available for the day. Market orders received in such a scenario shall be rejected by the Exchange and an appropriate message shall be sent to the respective trading terminal.

b. Market Orders shall be allowed to be traded only up to a certain markup/down price above/below the Last Traded Price (LTP).

c. Buy market orders shall be allowed to trade till (1+X%) of LTP.

d. Sell market orders shall be allowed to trade till (1-X%) of LTP 

• Changes in Multileg Orders (2 Leg / 3 Leg):

1. Multileg orders with the ‘Market Price’ condition for all (Futures and Options) contracts shall be discontinued. Market orders received in such a scenario shall be rejected by the Exchange and an appropriate message shall be sent to the respective trading terminal

2. Multileg orders with limit price conditions shall continue to remain available for all contracts.

 

This shall be in effect from February 06, 2023

Please refer to the document for more information

 

[Notification No. NSE/COM/55358]

 


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