The Securities and Exchange Board of India (SEBI) on May 24, 2024, issued a circular regarding the Enhancement of Dynamic Price Bands for scrips in the Derivatives segment.
Based on feedback received from various stakeholders, and discussions held with the Secondary Market Advisory Committee of SEBI and Stock Exchanges, the modified framework for price band formulation for scrips in the derivatives segment is provided below:
• Enhancing conditions precedent before flexing price band
• Aligning price bands between underlying and futures contracts
• Strengthening Volatility/Risk Management and minimizing information asymmetry for extreme price movement
• Sliding price band on account of flexing
• Trading in the options segment during cooling off in underlying/futures contracts
The circular would be implemented by Stock Exchanges in a phased manner.
[Circular No. SEBI/HO/MRD/TPD-1/P/CIR/2024/58]
