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SEBI targets stock price gaps across exchanges
NDTV Profit··11 Jun
SEBI proposed a mechanism to prevent the same stock from trading at widely different prices across exchanges. The proposal focuses on illiquid shares where one exchange may have no trades while another has active movement, leaving circuit limits and prices misaligned.
Prism
What It Means For You
- If you trade illiquid stocks, common price bands may reduce artificial gaps between exchanges.
- Better alignment can improve execution and reduce confusion when a stock is frozen at stale levels on one venue.
- Investors still need caution because liquidity risk remains even when pricing rules improve.
What's Happening
- SEBI proposed common pricing rules for stocks listed on multiple exchanges.
- Inactive exchanges may adopt closing prices from active or highest-volume exchanges.
- Public comments on the consultation paper are open until July 2.
Market Plumbing Matters
- Most investors notice market infrastructure only when prices diverge or trades cannot execute.
- Illiquid shares are more vulnerable to stale prices because they may not trade every day on every exchange.
- Regulatory coordination between exchanges can strengthen price discovery and market fairness.
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