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The Supreme Court on Friday asked the Securities and Exchange Board of India (SEBI) what the capital markets regulator intends to do for ensuring the protection of investors from extreme volatility in the stock market. While hearing a batch of pleas concerning the Adani-Hindenburg row, a bench headed by Chief Justice D Y Chandrachud observed one of the principal reasons which led the apex court to intervene in these petitions was the extreme volatility of stock market. "Now what does SEBI intend to do to protect this kind of volatility... which leads to a loss of investor value," the bench, also comprising justices J B Pardiwala and Manoj Misra, asked Solicitor General Tushar Mehta, who was representing the SEBI. "Has SEBI looked at whether it is necessary to tighten the regulations. What is SEBI intending to do in terms of ensuring the protection of investors," the bench said. "We must," Mehta said. The bench said SEBI has to take steps to ensure that instances of loss of investo
Capital markets regulator Sebi on Sunday came out with a proposal to strengthen the existing price band formulation for scrips in the derivatives segment to deepen volatility management and minimize information asymmetry in the market. Price bands for scrip or a derivative contract represent the boundaries within which the competing orders of buyers and sellers are accepted for the day by the trading system of the stock exchange. For scrips having derivative contracts on them, these price bands are dynamic and can be flexed depending on trading during the day. In its consultation paper, Sebi has proposed that in case a share in the futures and options segment falls or rises beyond 20 per cent a day, cooling off period should be increased in a phased manner, subject to a maximum cooling-off period of one hour from the current 15 minutes at present. After this, such scrip should be permitted to move only a further up to 2 per cent as against the current limit of 5 per cent. The ...