SEBI Proposes Common Pricing Rules for Stocks Listed on Multiple Exchanges

SEBI has come up with an important update. The Securities and Exchange Board of India (SEBI) has suggested a new method to ensure that the same shares are not traded at significantly different prices across exchanges in an effort to increase price discovery and liquidity in stocks that are thinly traded, according to the reports.

SEBI suggested that the inactive exchange should use the closing price of the active exchange to set the following day’s pre-open base price and price band when a stock fails to trade on one exchange but trades on another, according to a consultation paper published on Thursday.

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The investors must know this important update made by the SEBI. It’s crucial. According to SEBI, there have been times when non-trading on one exchange and continuous trading on another in a few illiquid stocks resulted in a significant difference in closing values between the exchanges, reported by the PTI.

According to the regulator, stock exchanges currently set price bands for each script on their own, based on their closing prices from the prior day, as highlighted before.

By reducing structural inefficiencies that might impede trading and enhancing price discovery, the proposal represents SEBI’s larger attempt to improve market infrastructure. Until July 2, comments from the public are being sought on the consultation paper.