Capital markets regulator Sebi on Monday came out with trading features pertaining to electronic gold receipts (EGR) on stock exchange platforms.
Under the guidelines, trading in EGR segment will be permitted from Monday to Friday and stock exchanges can set their trading hours within the time limit of 9 am to 11.30 pm /11:55 pm, Sebi said in a circular.
With a view to specifying the details of various aspects of the trading of EGR on the stock exchange, Sebi has issued guidelines on trade timings, transaction charges by stock exchanges, call auction in pre-open session, block and bulk deal, price bands, unique client code, investor protection fund and Investor service fund.
In respect of transaction charges, Sebi said stock exchanges will have to ensure that transaction charges on the trades executed for EGR on their trading platform, must be equitable and in the interest of investors.
With the view to ensuring orderly trading and protect market integrity, exchanges have been asked to implement a mechanism of price bands in the EGR segment to prevent acceptance of orders for execution that are placed beyond the price limit set by them.
"The initial price limit for the price band shall be set at 10 per cent of the previous closing price. In the event of a market trend in either direction, the dynamic price bands shall be relaxed by the stock exchanges in increments of 5 per cent," Sebi said.
Considering EGR is a new security class, Sebi said it may take time to build liquidity in this segment, it has been decided to allow one block deal window. The window will operate between 3:05 pm to 3:20 pm and the minimum order size for execution of trades will be Rs 10 crore.
EGRs bought or sold representing 5 per cent of the market-wide limit will constitute bulk deal.
Spelling out framework for call auction in pre-open session, Sebi said the pre-open session will be for a duration of 15 minutes from 8:45 am to 9 am, out of which 8 minutes will be allowed for order entry, order modification and order cancellation, 4 minutes for order matching and trade confirmation and the remaining 3 minutes will be the buffer period to facilitate the transition from pre-open session to the normal market.
The session will close randomly during last one minute of order entry -- anytime between 7th and 8th minute of the order entry. Such random closure will be system driven.
For transactions in EGR segment, it will be mandatory for the members to have Unique Client Code (UCC) for all their clients transacting on the stock exchanges, Sebi said.
The exchanges will not allow execution of trades without uploading of the UCC details by the members of the bourse, it added.
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