The Bombay Stock Exchange (BSE) on December 20, 2023, issued the notification regarding the Pre-Trade Risk Control - Enhancements to Market price order in Equity Derivatives segment.
The following has been stated namely: -
• Certain changes are being implemented to the market price order feature. Trading members are hereby requested to note the following enhancements which shall be implemented for market price orders –
1. Market price orders shall be allowed to be traded only up to a price range based on pre-defined market price impact (MPI) percentage of the last trade price (LTP) of that contract.
2. If price of opposite side orders is beyond the MPI price range, then the incoming market price order shall be converted to a passive limit price order at the LTP of the contract (or previous close price if LTP is unavailable).
3. In case of partial execution of the incoming market price order, if price of opposite side orders is beyond the MPI price range after initial matching of partial quantity, then the remaining quantity shall be converted to a passive limit price order at the LTP of the contract (latest trade price of the partially executed market price order).
• Apart from these enhancements, the following existing features shall continue to be available –
1. If there are no opposite side orders, then the entire incoming market price order is converted to a passive limit price order at the LTP of the contract.
2. In case of partial execution of the incoming market price order, if there are no opposite side orders after initial matching of partial quantity, then the remaining quantity is converted to a passive limit price order at the LTP of the contract (latest trade price of the partially executed market price order).
• The enhancements shall be made effective in the live environment for trading from Tuesday, December 26, 2023 onwards. To facilitate the roll-out, the changes shall be available during the mock trading session on Saturday, December 23, 2023.
[Notification No. 20231220-28]
