Sebi initiates probe into Nifty's 900-pt 'flash crash'

Sebi initiates probe into Nifty's 900-pt 'flash crash'

The Securities and Exchange Board of India (Sebi) has initiated a probe into the 'flash crash' at the National Stock Exchange. Nifty fell by about 900 points or 15.6 per cent on Friday morning, halting the trade on the bourse for about 15 minutes.

While the NSE blamed it on “erroneous” orders placed by stock broker member Emkay Global Financial Services in multiple trades of various stocks at low prices on behalf of an institutional client, Sebi sources said the regulator would be looking into “all aspects” of the incident.

NSE, in a release, pointed out that the market circuit filter got triggered due to entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs 650 crore. “These non-algo market orders have been entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book thereby causing the circuit filter to be triggered,” it said.

Emkay Global Financial Services has now been disabled by the NSE for trading, the release added. 

The Sebi is also looking into the issues related to ‘algorithmic’ trade – a latest-technology mechanism that allows execution of orders at a very high speed to take benefit of smallest of the change in share price, the official said. 

Markets closed the day in red, with benchmark indices snapping the 4-day winning streak as investors resorted to profit booking after recent strong rally in stock prices.

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