New Delhi: To rationalise the basis of shifting securities to and from the restricted segment and bring it in line with the current market dynamics, leading bourse BSE has decided to revise the criteria and periodicity for 'Trade for Trade' review.
The decision was taken in consultation with markets regulator Securities and Exchange Board of India (Sebi). In a circular, BSE said "the process of identifying the securities moving to Trade to Trade will be done on a fortnightly basis while securities moving to/from Trade to Trade will be done on a quarterly basis".
At present, the process is reviewed on a monthly basis. The securities in Trade for Trade segment are made available for trading under the T or XT Group. The settlement of securities available in these groups is done on a trade for trade basis and no netting off is allowed.
Spelling out fortnightly review criteria, BSE said that in case Sensex PE (price-earnings) multiple on the relevant date is in the range of 15-20, then securities having PE greater than 30 will be considered. In case, this is greater than 20 or less than 15, then the "difference will be rounded off to the nearest number and the same will be added or subtracted from 30".
However, the minimum base of PE multiple will be 25. Accordingly, securities with PE greater than this benchmark will be considered. All securities where the price variation is in positive direction will be taken up. Besides, market capitalisation of the securities should be Rs 500 crore or lower.
For the quarterly review for shifting securities to and from the Trade to Trade segment, BSE said volatility in the securities should be greater than three times that of Sensex over six fortnights, among others.
The exchange has exempted securities with dynamic price bands and newly-listed securities (IPO) and the securities that are made available for trading in the Trade for Trade segment for the first 10 trading days with applicable price band from such transfers.
