Securities and Exchange Board of India (Sebi) has asked the bourses to do away with imposition of such price bands in the case of non-IPO share listings.

Sebi said that it “has received representations expressing concerns of effect of price band on price discovery in cases of merger, de-merger, amalgamation, capital reduction and scheme of arrangement.”

Following consultation with the bourses, Sebi said it has been decided that in cases of merger, demerger, amalgamation, capital reduction, scheme of arrangement, and in cases of rehabilitation packages approved by the Board of Industrial and Financial Reconstruction and in cases of CDR packages, “there is no need to have a price band on the first day of commencement or recommencement of trading.” “The price band may be retained in all other cases on the first day,” Sebi added.

The new policy for commencement and recommencement of trading of securities would come into force with immediate effect, it added.