Amid the Adani-Hindenberg row, National Stock Exchange (NSE) issued a statement about its surveillance actions recently. The leading stock exchange asserted that its surveillance mechanism on all individual stocks is completely transparent and free of human interference.
Inclusion or exclusion of stocks under Additional Surveillance Measures (ASM) and other trading activity-based specific rules such as price bands, trade for trade (T2T), and others are based on parameters that consider price volatility, volumes, market capitalisation, client concentration, liquidity parameters etc, said NSE in a release on Sunday.
“The exact parameters along with the duration of applicability have been in public domain and have been applied consistently,” it said. “Common across exchanges, these rules are implemented automatically and no human discretion is allowed. These rules and review periods are also pre-announced to the market.”
The statement of world’s biggest derivative exchange comes two days after three Adani Group stocks were removed from the ASM mechanism. This included Adani Enterprises, Adani Green Energy and New Delhi Television (NDTV).
ASM is an initiative by Sebi and exchanges wherein the securities are moved to either short-term or long-term framework to protect the interest of investors
On the other hand, Adani Group’s two stocks will be put under the first stage of the long-term additional surveillance measures (ASM) from Monday, March 20, 2023, according to stock exchanges. The BSE and NSE in their circulars said the two securities will be moved from the long-term ASM framework Stage II to Stage I from March 20.
However, NSE did not name or mention any particular group or company in its statement issue. Stocks are put under the additional surveillance framework by exchanges to safeguard investors amid high volatility. Interestingly, Adani Group’s stocks have been put under the ASM framework due to high volatility post the Hindenburg’s report.
This entire framework has been time-tested. Further, any changes to the said rules are also pre-announced before any future action on basis of new rules becomes applicable, the exchange clarified in its statement.
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