labels: sebi
SEBI likely to set trading band for newly-listed scrips news
30 April 2007

Mumbai: Market regulator Securities and Exchange Board of India (SEBI), which recently banned several brokers from trading in shares on their debut on the bourses, plans to prescribe a first-day price band for initial public offers (IPOs) to check any irregular movements in the scrips.

"Until now there has not been artificial barriers, no filters, no circuit breakers at this level because we said let market discover the price," SEBI chairman M Damodaran as said, adding tjis may have to change.

"It would be a higher filter, not a normal filter, to enable price discovery. We believe on day one, we need a price filter." The prce band, however, would not affect the effective price discovery mechanism, he added.

SEBI is currently analysing available evidence of excessive price variation on the first day of trading to assess impacts and decide on imposing price filters on new listings.

SEBI had recently issued draft guidelines on the first day of re-listing of shares and had invited public comments on imposition of circuit filters.

The regulator also last week banned seven brokerages from post-IPO trading in shares for their alleged role in huge price movements recorded in stocks like Cambridge Technology, Mindtree and Pyramid Saimira Theatre on their first-day trading.

Some of these stocks witnessed unprecedented jump in their prices immediately after the listing.

Damodaran said about the price movements in newly-listed shares.



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SEBI likely to set trading band for newly-listed scrips