The BSE on Friday announced that the mechanism that automatically cancels reversal trades will not be applicable to the equity derivatives segment "until further notice".
The exchange introduced the mechanism -- Reversal Trade Prevention Check (RTPC) -- in its equity derivatives segment in March 2016.
It was introduced with an intention to prevent potential cases of trade reversal taking place on the trading platform. It acts as a preventive measure wherein the second leg of a potential reversal trade will automatically be cancelled by the trading system at the time of order matching in an online real-time manner.
"Reversal Trade Prevention Check (RTPC) in equity derivatives segment, it is to inform that the said Check shall not be applicable until further notice," BSE said in a circular.
Reversal of trade implies that for a buy transaction initially entered into by a broker for a particular client for a specific quantity, there is a corresponding sale transaction that takes place during the day for the same quantity between the same set of broker/clients and vice-versa.
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