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HomeLatest NewsBusinessBSE Introduces New Limit Price Protection Mechanism: Heres What It Brings

BSE Introduces New Limit Price Protection Mechanism: Heres What It Brings


New Delhi: In a transfer geared toward bolstering pre-trade danger management measures, the Bombay Inventory Trade (BSE) has introduced the implementation of a Restrict Worth Safety (LPP) mechanism in its fairness derivatives phase, efficient April 16, 2024.

What Modifications Restrict Worth Safety Brings?

The brand new mechanism, unveiled on Friday, April 5, will prohibit the value vary for orders within the derivatives market. Beneath this initiative, the buying and selling system will settle for restrict value orders inside particular thresholds primarily based on the reference value. (Additionally Learn: ICICI Financial institution Clients Alert! Financial institution Points Warning On On-line Fraud)

Orders falling outdoors this vary can be robotically rejected. (Additionally Learn: Japan Launches E-Visa Program For Indian Vacationers: Verify Eligibility, Utility Course of, And Extra)

What BSE’s Round Says?

In accordance with the BSE round launched on April 5, the change emphasised, “To strengthen the pre-trade danger management measures within the fairness derivatives phase, Trade will implement LPP Mechanism with impact from Tuesday, April 16, 2024.”

Mock Buying and selling Session Session

To make sure a seamless transition and permit market contributors to familiarize themselves with the brand new mechanism, the BSE has scheduled a mock buying and selling session for April 13, 2024 (Saturday).

LPP Mechanism Targets

The LPP mechanism’s major goal is to safeguard in opposition to uncommon buying and selling actions and curb erratic trades. Orders positioned outdoors the outlined value vary can be robotically rejected by the system.

Related To NSE LPP Mechanism 

The BSE’s transfer follows the same initiative by the Nationwide Inventory Trade (NSE) in October 2022, which launched an LPP mechanism in its futures and choices phase to fortify pre-trade danger controls and guarantee orderly buying and selling.

Related Initiatives In Future

The BSE highlighted that it might periodically assessment the utilization of those enhancements and make additional changes primarily based on suggestions from market contributors and as deemed obligatory.

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