BSE, NSE Extend Additional Surveillance Measures, Trade-For-Trade Settlement To SME Stocks

In a joint surveillance meeting of exchanges and market regulator SEBI, it was decided that the short-term ASM framework and trade-for-trade framework will be extended to SME stocks subject to certain changes, according to circulars issued by BSE and NSE, Mint reported.

In the trade-for-trade (TFT) framework, speculative trading is not allowed and delivery of shares and payment of consideration amount is mandatory.

In the trade-for-trade (TFT) framework, speculative trading is not allowed and delivery of shares and payment of consideration amount is mandatory.

In a move to curb speculative trading in the small and medium enterprises (SME) segment, stock exchanges BSE and the National Stock Exchange (NSE) on Monday announced that these SME stocks will come under the Additional Surveillance Measures (ASM) framework and trade-to-trade settlement.

In a joint surveillance meeting of exchanges and market regulator Securities and Exchange Board of India (Sebi), it has been decided that the short-term ASM framework and trade-for-trade framework will be extended to SME stocks subject to certain changes, according to circulars issued by BSE and NSE.

A stock can be placed under additional surveillance measures in case it falls under a certain basis including high variation between high and low prices and variation in volumes as compared to the monthly average. Such shares also attract higher margin requirements.
In the trade-for-trade (TFT) framework, speculative trading is not allowed and delivery of shares and payment of consideration amount is mandatory, according to the report.

"TFT framework shall be in conjunction with all other prevailing surveillance measures being imposed by the Exchanges from time to time. Further, It may also be noted that the shortlisting of securities under TFT is purely on account of market surveillance, and it should not be construed as an adverse action against the concerned company / entity," the circular said.