Consolidated Master Circular

Equity Segment

(As on December 30, 2016)

Item 1

MARKET TYPES

1.1 Price Bands

1.2 Trade for Trade

1.3 FII-Investment under Portfolio Investment Scheme (6 Lakh Series)

1.4 SME Segment

1.5 SME ITP Segment

1.6 Periodic Price Band

Item 2

MARKET PARAMETERS

2.1 Illiquid securities (Periodic Call Auction for illiquid scrips)

2.2 Index based market wide circuit breaker

Item 3

COMPLIANCE

3.1 Penalty Norms

Item 4

Policy

4.1 Policy for Annulment of trades undertaken on BSE Trading platform

Item 5

Other Surveillance Measures

5.1 Suspension of companies as a Surveillance measure (Auditor Committee)

MARKET TYPES

1.1 Price Bands Go Top

1) SEBI has prescribed that all Individual scrips will have appropriate price bands

upto 20% either way except for the scrips having derivatives products on them.

Accordingly, the Stock Exchanges, as a Surveillance measure revises the price bands

of the scrips having fixed price bands to 10%, 5% and 2 % as the case may be. The

said revision is based on the pre-determined objective criteria jointly decided by the

Exchanges in consultation with SEBI.

2) Scrips on which derivative products are available have dynamic price bands wherein

the initial threshold of 10% on the previous closing price is applied.

The dynamic circuit filters are relaxed in increment of 5% on the same side in which

the stock price is moving provided there are minimum 10 trades with multiple UCC at

trigger % or above. The trigger limit for such relaxation are 9.90%, 14.90% and so

on, for e.g. if the last trade occurs at 9.90% or more of the base price (i.e. previous

close price) with atleast 10 trades and multiple UCC, the dynamic circuit filter shall be

relaxed to 15%. Subsequently, if the last trade occurs at 14.90% or more then the

same would be relaxed to 20%.

Notice link is as under :

Revision in Dynamic Circuit Filter for Stocks having dummy circuit filter

A list of equity stock on which dynamic circuit filter applied is as under.

http://www.bseindia.com/markets/equity/EQReports/sur_Price_monitoring.aspx?e

xpandable=6

3) Securities listing after Initial Public Offering:

As per Exchange Notice No. 20120123-26, dated January 23, 2012, & SEBI Circular

No.: CIR/MRD/DP/02/2012, dated January 20, 2012, regarding Call Auction in Pre

Open Session & Trade Controls in normal trading session for IPO and other

categories of scrips is as under:

For issue size up to Rs. 250 Cr., trading shall take place in the Trade for Trade

segment for the first 10 days with applicable price bands, wherein for the first day:

No price band during pre-open session through call auction mechanism

The price band in the normal trading session shall be 5% of the equilibrium price

/ issue price.

For issue size greater than Rs. 250 Cr., the applicable price bands for the first day shall be:

No price band during pre-open session through call auction mechanism

The price band in the normal trading session shall be 20% of the equilibrium price

/ issue price.

4) Re-listed Securities

In following cases,

Merger, demerger, amalgamation, capital reduction/consolidation, scheme of arrangement, in terms of the Companies Act and/or as sanctioned by the Courts, in cases of rehabilitation packages approved by the Board of Industrial and Financial Reconstruction under Sick Industrial Companies Act and in cases of Corporate Debt Restructuring (CDR) packages by the CDR Cell of the RBI.

Securities that are being admitted to trading from another exchange by way of direct listing/MOU/securities admitted for trading under permitted category,

Where suspension of trading is being revoked after more than one year.

Trading shall take place in the Trade for Trade segment for the first 10 days with

applicable price bands, wherein for the first day:

No price band during pre-open session through call auction mechanism

The price band in the normal trading session shall be 5% of the equilibrium price.

For scrips under point no. 3 & 4, Exchange imposed dummy price bands during the SPOS

session which are relaxed based on the order book.

Exchange Notice with regards to Securities listing after Initial Public Offering link is as

under :-

Call Auction in Pre-Open Session & Trade Controls in normal trading session for Initial

Public Offerings (IPO) and Other Category of Scrips

1.2 Trade for Trade Go Top

As a part of Surveillance measure the Exchange transfers various scrips for settlement on a

Trade-to-Trade basis. The process of identifying the securities moving to Trade to Trade will

be done on a fortnightly basis while securities moving to/from Trade to Trade will be done

on a quarterly basis based on the market capitalization, price earnings ratio, price variation

vis-à-vis the market movement, volatility, volume variation, client concentration and

number of non promoter shareholders etc. The criteria for shifting scrips to/from for

settlement on T2T basis are decided jointly by the stock exchanges in consultation with SEBI

and reviewed periodically. Scrips on which derivatives products are available are not

considered for transfer to Trade for Trade segment.

If a scrip is shifted for settlement on Trade-to-Trade basis, selling/ buying of shares in that

scrip results into giving/ taking delivery of shares at the gross level and no intra day netting

off/ square off facility is permitted. The scrips which form part of the 'Z group' are

compulsorily settled on a trade-to-trade basis.

The T2T segment criteria for shifting scrips to/from Trade for Trade segment the link is as

under:

http://www.bseindia.com/markets/equity/EQReports/sur_Price_monitoring.aspx?expandab

le=6

1.3 FII-Investment under Portfolio Investment Scheme (6 Lakh Series) Go Top

As per Exchange Notice No. 45424/2000 dated March 29, 2000, the Exchange, has

introduced trading under FII-Investment under Portfolio Investment Scheme (6 Lakh

Series). The 6 Lakh series would be used for executing trades on behalf of Foreign

Institutional Investors (FII) in companies where the cut off limit of FII investment has been

reached.

Department of Industrial Policy and Promotions vide its guidelines dated April 5, 2013 have

prescribed aggregate limits for foreign investments for Portfolio Investment Schemes by FII

and NRI in certain sectors.

Accordingly, NRI can trade in the 6 Lakh series only for the securities having composite FII

& NRI limit. In view of the aforesaid, the trading members are hereby advised to ensure that

trades for only eligible clients are under taken in 6 lakh series failing which as per the

provision of aforementioned notice, following punitive action will be attracted:

Violation Effect on FII / NRI Limit * Punitive Action

Case I :

FII /NRI limit is not affected

Fine on the buyer, @ 1%

of the value of

transactions or Rs. 1 lakh,

whichever is lower.

Buyer : Non-Eligible Client

(Non- institutional, Retail

client) Seller : Eligible Client

(FII / NRI)

Case II

FII/NRI limit is breached.

Transaction will be closed

out at the close out rate

as applicable for

transaction in the normal

Rolling Settlement.

Further, a penalty of Rs.

25,000/- per

transactions, so wrongly

entered, will be levied on

the concerned Seller

member.

Seller: Non-Eligible Client

(Non-FII/NRI).

Buyer : Eligible Client

(FII/Mutual Fund/Bank /NRI

or DFI)

* NRI will be treated eligible client only for the sectors where the composite limits are

prescribed for FII and NRI.

Exchange Notice with regards to FII-Investment under Portfolio Investment Scheme (6

Lakh Series) link is as under :-

TRADING & SETTLEMENT

Link to the list of scrips which traded under Institutional series i.e. 6 Lakh Series –

under segment Equity- Institutional Series

http://www.bseindia.com/corporates/List_Scrips.aspx?expandable=1

1.4 SME Segment Go Top

BSE Ltd has set up the BSE SME Platform as per the rules and regulations laid down by SEBI.

BSE SME Platform offers an entrepreneur and investor friendly environment, which enables

the listing of SMEs from the unorganized sector scattered throughout India, into a regulated

and organized sector.

The obligations and responsibilities of Market Makers

The main obligation of the Market Maker is to provide liquidity in the market for securities

that will get listed in BSE SME Exchange, as they may have lower levels of liquidity. The

obligations and responsibilities of Market Maker will be as follows:

The Market Maker is obligated to provide bid ask quotes and the associated quantities as

per the guidelines for each of the securities for which he is authorized by the Exchange.

The continuous trading session will be same as that of the equity market hours. As per

the SEBI guidelines, the Market Maker would have to be present for 75% of the time in a

day and offer two way quotes for his set of securities. His 2 way quotes should be

outstanding in the order book, for at least 75% of the time in a trading session. The period

in which a single side quote only of the Market Maker is pending in the order book, will

not be considered for calculating the period during which the Market Maker is required to

be present. However, in case of circuit the market maker is not obliged to give two way

quotes. There are also some exceptional circumstances where the market maker may get

the feeling that some party in its individual capacity or in group/syndicate trying to

destabilize the market making or price of the scrip. Under such circumstances, market

maker may stop market making and bring it in the notice of the Exchange by the end of

the day. Exchange will do the necessary investigation and if found true will not consider it

a default in market making.

On the first day of the listing, there will be pre-opening session (call auction) and there

after the trading will happen as per the equity market hours. The circuits will apply from

the first day of the listing on the discovered price during the pre-open call auction.

The Marker maker may also be present in the opening call auction, but there is no

obligation on him to do so.

There will be special circumstances under which the Market Maker may be allowed to

withdraw temporarily/fully from the market – for instance due to system problems, any

other problems. All controllable reasons require prior approval from the Exchange, while

force majoure will be applicable for non controllable reasons. The decision of the Exchange

for deciding controllable and non-controllable reasons would be final.

Punitive Action in case of default by Market Makers

The Exchange will monitor the obligations on a real time basis and punitive action will be

initiated for any exceptions and/or non-compliances. Penalties / fines may be imposed by the

Exchange on the Market Maker, in case he is not able to provide the desired liquidity in a

particular security as per the specified guidelines. These penalties / fines will be set by the

Exchange from time to time. The Exchange will impose a penalty on the Market Maker in case

he is not present in the market (offering two way quotes) for at least 75% of the time.

The nature of the penalty will be monetary as well as suspension in market making activities

/ trading membership.

The following is the proposed penalty schedule:

Sr. No. Time period of absence of the Market Maker Penalty to be imposed

1 1 day or less Rs. 2,000

2 More than 1 day and up to 5 days (at a stretch) Rs. 10,000

3 More than 5 days and up to 10 days (at a stretch) Rs. 25,000

4 More than 10 days and up to 15 days (at a stretch) Rs. 50,000

5 More than 15 days (at a stretch) Temporary suspension

Note: ‘Days’ are trading days of the Exchange

The Department of Surveillance and Supervision would decide and publish the penalties /

fines / suspension for any type of misconduct/ manipulation/ other irregularities by the Market

Maker from time to time.

Price Band and Spreads

The SEBI Circular CIR/MRD/DP/ 02/2012 January 20, 2012, has laid down that for issue size

up to rupees 250 crores, the applicable price bands for the first day shall be:

i. In case equilibrium price is discovered in the Call Auction, the price band in the normal

trading session shall be 5% of the equilibrium price.

ii. In case equilibrium price is not discovered in the Call Auction, the price band in the

normal trading session shall be 5% of the issue price.

Additionally, the trading shall take place in TFT segment for first 10 days from commencement

of trading.

The following spread will be applicable on the BSE SME Exchange/ Platform.

Sr. No. Market Price Slab (in Rs.) Proposed spread (in % to sale price)

1 Up to 50 9

2 50 to 75 8

3 75 to 100 6

4 Above 100 5

Exchange Notice with regards to SME Segment link are as under :-

CIRCULAR - Market Making and Listing Fees on BSE SME Exchange

Market Making on BSE SME Platform

1.5 SME ITP Segment Go Top

Members are hereby informed that the Exchange commenced Trading in the ITP Segment

from 11th February 2014. The trading parameters and Price Bands are as follows:

Trading Parameters:

The minimum order size will be Rs. 10 Lakhs and tick size will be Re1. All the trades will be

done on trade for trade basis.

Price Bands:

In order to avoid erroneous order entry by participants, price bands will be applicable on all

the Trades. Price band range will be +/-10% for the closing price. The above price operating

range is dynamic and same can be relaxed further as per the discretion of stock Exchange

after the surveillance department receives the request from the parties either in writing or

through mail on bse.surv@bseindia.com

Exchange Notice with regards to SME ITP Segment link are as under :-

Launch of Institutional Trading Platform on BSE SME

Fixed Price band of 10% for scrips trading on SME_ITP Segment

1.6 Periodic Price Band Go Top

(Applicable to Securities exclusively traded at BSE)

Exchange had introduced periodic price bands for the securities that are exclusively traded at

the Exchange. The securities categorized in Group A and Group B shall be excluded from the

list of securities to which periodic price bands are applicable with effect from Monday February

01, 2016. The applicable periodicity and corresponding price bands were specified in its notice

nos. 20150806-24 dated August 06, 2015 and 20150930-36 dated September 30, 2015 and

20160129-22 dated January 29, 2016 are as under.

Daily Price Band as

Applicable Periodic Price Bands

Weekly Monthly Quarterly Yearly

20% +/- 60 % +/-100 % +/-200 % +/-400 %

10% +/- 30 % +/-60 % +/-100 % +/-200 %

5% +/-20 % +/-30 % +/-60 % +/-100 %

2% +/-10 % +/-20 % +/-30 % +/-50 %

Note - for lower price bands (downward limits), please refer point no. 1 below

In addition to the above, for monthly, quarterly and yearly price bands, a factor of 200 % of

S & P BSE Midcap Index movement (subject to minimum 2% movement) shall be applied to

take into account the overall movement in the market. This factor shall be added in the

direction of index movement (rounded off to the nearest number) and threshold of the

opposite direction will remain unchanged.

A brief primer on periodic price band mechanism and related rules is given as under.

1. A price band value on the lower side cannot be specified in negative. Hence, in such cases,

applicable tick size of a security shall be taken as the minimum possible value as the lower

limit of a price band, irrespective of the value calculated as per downward % slab. Example -

For a security having tick size as 1 paisa, the lowest value possible for individual price bands

shall be 1 paisa and securities having tick size as 5 paise shall have lowest possible value as

5 paise.

2. From the calculated individual lower and upper price limits for all periods (daily / weekly /

monthly / quarterly / yearly), the Final Upper DPR (Daily Price Range) and Final Lower DPR

shall be arrived based on the following rule

Final Upper DPR shall be the "Minimum of all individual Upper Price limits"

Final Lower DPR shall be the "Maximum of all individual Lower Price limits"

3. The reference price for setting up periodic price bands shall be as follows:

Price Band

Reference Price Remarks

Daily Previous closing price

Whenever there is no trading on the relevant day, previous close price as available shall be considered as a reference

price.

Weekly Close price of last trading day of the

preceding week

Monthly Close price of last trading day of the

calendar month

Quarterly Close price of last trading day of the

preceding quarter

Yearly Close price of last trading day of the preceding year i.e. September 30th.

4. In case of downward revision in daily price bands i.e. from 20% to 10% or 10% to 5% or

5% to 2% as the case may be, the corresponding daily, weekly, monthly limits shall be revised

based on the revised daily price band. The quarterly and yearly limits shall remain static at

the initially set highest level till its next review date.

5. In case of downward revision in daily price bands, if Upper DPR limit is lower than its close

price or lower DPR limit is higher than the close price, then the close price shall be considered

as the corresponding Upper DPR limit or Lower DPR limit respectively.

6. In cases of upward revision in daily price band all individual lower and upper price bands

for all periods (daily / weekly / monthly / quarterly / yearly) shall be revised based on the

new revised daily price band subject to them not breaching their Yearly and Quarterly price

limit already set on relevant reference prices applicable at the time of setting / review of

Yearly and Quarterly periodic price bands.

7. For securities where corporate action is effected, upper & lower periodic price bands shall

be revised by applying the Adjustment Factor to the relevant reference rates.

8. For securities trading below Re.1/-, there may be a situation wherein the computed higher

and lower side price limits may be same resulting in no price movement in the security. In

order to avoid such situation, the upper limit shall be adjusted one tick size to provide the

movement in the respective securities.

Exchange Notice with regards to Periodic Price Band links are as under :-

Introduction of additional periodic Price bands for the securities exclusively listed & traded on BSE

Trading Platform

Additional periodic Price Bands for the securities exclusively traded on BSE Trading Platform - Go Live

Additional Periodic Price Bands – Update 1

Additional Periodic Price Bands - Update 2

MARKET PARAMETERS

2.1 Illiquid securities (Periodic Call Auction for illiquid scrips) Go Top

SEBI vide circular no. CIR/MRD/DP/6/2013 dated February 14, 2013 issued guidelines for

trading in the illiquid scrips through Periodic Call Auction Mechanism which was introduced

at BSE w.e.f. April 8, 2013. Stock Exchanges identify illiquid scrips at the beginning of every

quarter and move such scrips to periodic call auction mechanism.

SEBI, based on recommendations of SMAC and feedback received from market participants

and Stock Exchanges, vide its Circular No. CIR/MRD/DP/38 /2013 dated December 19, 2013

rationalized the periodic call auction mechanism introduced vide its circular dated February

14, 2013, as under:

a) A scrip which trades in the normal market and is not shifted to trade for trade settlement,

shall be classified as illiquid on a stock exchange if the following conditions are met:

Average daily turnover of less than Rs.2 lakhs calculated for previous two

quarters

And

The scrip is classified as illiquid at all Exchanges where it is traded

b ) Of the scrips identified as per above criteria , scrips which satisfy any of the following

conditions shall be excluded :

Scrips with average market capitalization more than Rs.10Cr.

Scrips where company is paying dividend in at least two out of last three

years.

Scrips where company is profitable in at least 2 out of last 3 years, and not

more than 20% of promoters shareholding is pledged in the latest quarter and

book value is 3 times or more than the face value.

c ) The scrip has remained in periodic call auction for at least one quarter.

Trading members are advised to exercise additional due diligence while trading in these

securities either on own account or on behalf of their clients.

Trading Members are requested to note the penalty criteria for certain trades:

In the event where maximum of buy price entered by a client (on PAN basis) is equal to or

higher than the minimum sell price entered by that client and if the same results into trades,

a penalty shall be imposed on such trades. The penalty shall be calculated and charged by

the exchange and collected from trading members on a daily basis. Trading members may

recover such penalty from clients. The penalty so collected shall be deposited to Investor

Protection Fund.

Penalty for each such instance per session will be higher of the following:

0.50% of the trade value for sale and 0.50% of trade value for the buy, resulting in

1% penalty for the client on PAN basis.

OR

2500 /- for the buy trade and 2500 /- for the sell trade, resulting in penalty of 5000/-

for the client on PAN Basis

The relevant quarter for list of illiquid securities are as per the link attached:

http://www.bseindia.com/investors/illiquidscrips.aspx?expandable=4

2.2 Index based market wide circuit breaker from October 14, 2013 onwards Go

Top

Exchange has issued notice no. 20130930-37, dated September 30, 2013. Pursuant to SEBI

Circular no. CIR/MRD/DP/ 25 /2013 dated September 03, 2013, the Index based market

wide circuit breaker triggers of 10%, 15% and 20% will now be calculated on daily basis on

the closing value of the S&P BSE Sensex for the next trading day. Additionally, a 15 minutes

pre opening session post each trading halt will be introduced.

The index-based market-wide circuit breaker system will apply at 3 stages of the index

movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered

will bring about a coordinated trading halt in all equity and equity derivative markets

nationwide. The market-wide circuit breakers are triggered by movement of either the S & P

BSE Sensex or the NSE CNX Nifty, whichever is breached earlier.

The trigger limits, respective halt duration and Pre Opening Session duration is given below:

Trigger

Limit

Trigger Time Halt duration Pre Opening

Session duration

post each halt

10 % Before 1 Pm 45 Minutes 15 Minutes

At or After 1 PM

to 2.30 PM

15 Minutes 15 Minutes

At or after 2.30

PM

No Halt -

15 % Before 1 PM 1 Hour 45 minutes 15 Minutes

At or after 1 PM

before 2 PM

45 Minutes 15 Minutes

On or after 2 PM Trading halt for the

remainder of the day.

-

20 % Any time of the

day

Trading halt for the

remainder of the day.

-

As per the provision of the aforementioned circular, the triggers applicable for the T + day

based on the closing value of S & P BSE SENSEX on T day are disseminated on Exchange

on the following link ;

http://www.bseindia.com/indices/MktCktBreaker.aspx

COMPLIANCE

3.1 Penalty Norms Go Top

Exchange has issued notice no. 20090320-30 dated the March 20, 2009 for norms for

violations detected by Department of Surveillance & Supervision in the course of surveillance

& investigation functions. Exchange Notice with regards to penalty norms is as under:-

Revision of penalty norms of Department of Surveillance & Supervision

4. Policy for Annulment of trades undertaken on BSE Trading platform Go Top

Trade Annulment request - Eligibility Criteria for submission The trade/s for which annulment

is requested shall be called as “Trade/s in question” hereafter for brevity and shall have to fulfill

all the conditions stated below for the Exchange to accept it for further processing;

Value of such trade/s in question is atleast Rs. 20 Lac

Where a trade refers to a single transaction of Rs. 20 Lacs & above or series of transactions

emanating out of a single order with aggregate value of Rs. 20 Lac and above. And. It shall be

the first request for annulment by the trading members during the calendar Quarter in the

segment. And Trade/s Annulment request submitted within 30 minutes from the occurrence of

the trade. Trade/s in question are of securities with applicable price band of 10 % and above

Policy for Annulment of trades undertaken on BSE Trading Platform

Policy for Review of Trade Annulments undertaken on BSE Trading platform

5. Suspension of Companies as Surveillance measure (Auditors Committee) Go Top

The Exchange has specified the process that shall be followed for revocation of suspension of trading in securities of various companies that were suspended on account of surveillance reasons. The process inter alia states that the trading in the securities of the companies satisfying the suspension parameters of the Exchange shall be suspended till such time the company submits the auditor certificate and other specified documents confirming compliance with regards to the preferential issue(s) made by the companies. After receipt of complete documents, the matter shall be placed before the Auditors Committee of the Exchange (“Committee”) to ascertain veracity of reasons given by the company in fulfilment of conditions. Based on the recommendation of the Committee, the Exchange shall take further action in the matter. .

Surveillance Measure - Auditor Committee