Financial Daily from THE HINDU group of publications
Thursday, Mar 13, 2003
Financial Daily from THE HINDU group of publications Thursday, Mar 13, 2003 |
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Markets
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Stock Exchanges SEBI directs exchanges to switch to T+2 mode C.R. Sukumar
HYDERABAD, March 12
THE Securities and Exchange Board of India (SEBI) has directed all the stock exchanges to shift over to T+2 rolling settlement from April 1 from the existing T+3 rolling settlement. According to senior SEBI officials, the group constituted by the market regulator on the secondary market risk management had discussed the issue of rationalisation of the margining structure in the shortened T+2 rolling settlement. The group had also held various meetings and pursuant to the deliberations of the group, the stock exchanges would now need to follow risk management structure from the beginning of the next fiscal as per the new guidelines. SEBI has advised the stock exchanges to categorise the stocks into three groups for the purpose of imposition of margins base on the risk containment measures for the scrips based on their volatility and liquidity. According to SEBI, the stocks that have traded at least 80 per cent, with a variation of five per cent, of the days for the previous 18 months from July 1, 2001, should constitute the group-I and group-II. Of these scrips identified, those having mean impact cost of less than or equal to one per cent should be categorised under group-I. Those scrips where the impact cost is more than one per cent should be categorised under group-II. The remaining stocks would fall into the group-III category. Further, according to SEBI, the impact cost should be calculated at the 15th of each month on a rolling basis considering the order book snapshots of the previous six months. On the basis of the impact cost so calculated, the scrips should move from one group to another from the 1st of the next month. The SEBI has also advised all exchanges to adopt a common methodology for carrying out the calculations for mean impact cost. The details of calculation methodology and relevant data should also be made available to the public through the exchange's Web site.
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