Mumbai: Strengthening its mechanism to deal with freak and erroneous trades, top stock exchange BSE on Wednesday issued detailed guidelines for trading members to seek review of annulment of trade.
As per the mechanism to review annulled transactions, trading members whose request for the trade annulment is rejected can submit a request to review the same at the designated email id—bse.tar@bseindia.com. The review request has to be submitted with prescribed details including trade annulment unique request ID.
The BSE said it would refer the review request along with relevant particulars to the exchange's trading and surveillance oversight committee, which will then provide its recommendations to the stock exchange within 30 days of the receipt of the review request.
“The payout with respect to both securities and funds as may be applicable relating to the settlement of such trades shall be withheld till such review is completed," the exchange said in a circular.
On receipt of the recommendation from the trading and surveillance oversight committee, BSE said it "would convey the decision as soon as possible but not later than two working days". "The decision taken by the trading and surveillance oversight committee shall be final and binding on all parties and pay-out shall be released accordingly," it added.
The review requests for the equity segment need to be received by the exchange on first day after the trades (T+1) by 6 pm. For equity derivatives and currency derivative segment the review request has to be send on the day of the trades by 8 pm.
Erroneous or freak trades also include trades taking place due to malfunctioning of a trading system, as also the transactions executed due to a punching error by a dealer, which in the market parlance is known as 'fat-finger trades'.
BSE would disseminate details of trade annulment review request and committee’s decision on its website.
