The National Stock Exchange of India Limited (NSE) on March 24, 2023, issued a notification regarding the Pre-Trade risk controls – Validation for Stop Loss Limit Order Entry.
The following has been stated namely: -
• The review and enhancements are required by market participants to optimize and strengthen the pre-trade risk control measures for preventing aberrant orders.
• Members are requested to note that below is an additional validation applicable for SL-Limit Order.
1. Incoming SL-Limit orders having a difference between the trigger price & limit price greater than the permissible limit, shall be rejected by the Exchange.
2. Applicable formulation for the SL-Limit order has been stated
3. The parameter to arrive at the permissible limit has been stated in a table attached to the notification
• The Exchange may review the aforesaid mechanism and various applicable parameters from time to time based on the experience gained and inputs received from market participants/regulators.
The changes shall be made effective in Live from April 03, 2023, and shall be available for testing in mock being conducted on April 01, 2023.
[Notification No. NSE/FAOP/56127]
