The Securities and Exchange Board of India (Sebi) on Friday has announced some new and more robust measures to control the volatility in stocks to help the investors. SEBI and advised to not to trade on short selling. Along with the restriction on short selling, SEBI has also announced a 10-fold increase in penalties, cut in the outstanding positions of the stocks are some of the important measures the organization has just rolled out.
Sebi has said the short position in the subsidiaries sell can't surpass the estimation of the properties of the fundamental stocks or the bonds gave by them. An extra position cutoff of Rs 500 crore will be accessible for the futures and options (F&O) fragment. Market players said the move was to demoralize brokers from forcefully trading in the short positions.
The market controller and stock trades have been feeling the pressure to get control over tremendous changes in stocks, which were making tensions among the financial specialists. The benchmark indices have been cut 12 percent this week and 22 percent so far this month.
Further, Sebi has also slashed the market-wide position limit(MWPL) to half for very volatile stocks — those that see a normal day by day change of 15 percent during this recent week.