SEBI has announced modification in duration for call auction in pre-open session for Initial Public Offer (IPO) and Relisted scrips

SEBI on June 20, 2024 has announced modification in duration for call auction in pre-open session for Initial Public Offer (IPO) and Relisted scrips. It was observed that during the call auction in pre-open session for certain IPO and relisted scrips, orders were placed at higher price in large volumes and significant portion of such orders were cancelled just before the closure of call auction session. This may have created false demand and supply and possibly manipulating the price of the scrips to the detriment of common investors.

In order to curb the misuse of the call auction session, based on the report of Working Group of Stock Exchanges and recommendations of Secondary Market Advisory Committee of SEBI, it has been decided to modify the current provisions related to call auction session for IPO &relisted scrips and introduce additional surveillance measures at stock exchanges as follows:

  1. The session shall be for a duration of 60 minutes i.e. from 9:00 a.m. to 10:00 a.m., out of which 45 minutes shall be allowed for order entry, order modification and order cancellation, 10 minutes for order matching and trade confirmation and the remaining 5 minutes shall be the buffer period to facilitate the transition from pre-open session to the normal trading session.
  2. The session shall close randomly during last ten minutes of order entry i.e. anytime between 35thand 45th minute of the order entry window. Such random closure shall be system driven.

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