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In a boost to several micro-cap companies, stock exchanges, in consultation with markets regulator SEBI on Tuesday decided to lift trading curbs on stocks that come under Enhanced Surveillance Measures (ESM).
Earlier, the stocks under ESM Stage-II were allowed to trade only once a week. Now, this has been revised to all trading days, a circular from the exchanges said.
It may be recalled that BSE-listed Mercury EV Tech last week had challenged the framework at the Securities Appellate Tribunal.
BSE and NSE had introduced ESM framework for stocks that have a market cap of less than ₹500 crore from June 5 to curb excess volatility.
The parameters for short-listing the securities under the ESM framework include high-low price variation and close-to-close price variation.
Under the framework, the exchanges said, “... the trading for these securities will be settled through a trade for trade mechanism with a price band of 5 per cent or 2 per cent (if the scrip is already in the 2 per cent band).”
“For securities in Stage II, the trading will be settled through a trade for trade mechanism with a price band of 2 per cent. The trading for these securities will be permitted once a week with periodic call auctions,” it had said.
Traders have welcomed the move as it will enhance liquidity in these stocks.
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