BSE introduces additional periodic price bands

BSE has introduced additional price bands to be applicable weekly, monthly, quarterly and yearly for stocks which do have derivative products based on them. At present, stocks have daily price bands which restrict price movement, either up or down, beyond a certain limit.

Currently, stocks have a daily price band of 20%, 10%, 5% and 2%. Additionally stocks will now have to follow price bands on a weekly, monthly, quarterly and yearly basis. Stocks within the 20% band will have to adhere to a 60% up or down price band, which means that the price of the stock can rise or fall by only 60% in a week. Similarly, in a month, the stock cannot increase or decrease by 100%, in a quarter not more than 200% and not more than 400% on a yearly basis.

These measures have been taken to counter volatility in the markets, exchange officials said.

"In order to enhance the market integrity and to prevent excessive price movement in the securities listed on its trading platform, BSE as a pre-emptive surveillance measure has an additional framework of periodic price bands in addition to the aforesaid daily price band framework. These additional periodic price bands shall be applicable to securities exclusively listed and traded on BSE Equity Trading Platform including securities listed on SME and SME ITP platform," said a circular on the BSE website.

For stocks in the 10% daily band, the weekly band has been fixed at 30%; monthly band at 60%. On a quarterly basis the stock cannot move beyond 100% and not beyond 200% in a year.

Stocks in the five% daily band can increase or decrease by 100% in a year and 60% in a quarter. Those with a two% daily band can rise or fall by 50% each year and 30% per quarter.