Call Auction in Pre-open session for Initial Public Offering (IPO) and other category of scrips

CIR/MRD/DP/01/2012 · 2012-01-20 · SEBI

Summary

This circular extends the Call Auction mechanism in the pre-open session to Initial Public Offerings (IPOs) and re-listed scrips on their first day of trading. It establishes a 60-minute session duration with specific rules for order entry, matching, and buffer periods while prohibiting market orders and price bands. The document outlines risk management requirements based on issue size and mandates implementation by stock exchanges within four weeks.

Text

In continuation to the above, it has been decided to extend Call Auction mechanism to IPOs and scrips as defined under para 1(c) of SEBI circular no. SEBI/Cir/ISD/1/2010 dated September 2, 2010 (hereinafter referred to as Re-listed Scrips), on the first day of trading/ re-commencement of trading in the manner prescribed as follows -

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.

The session shall close randomly during last one minute of order entry i.e. anytime between 44th and 45th minute of the order entry. Such random closure shall be system driven.

There shall be no price bands in the pre-open session.

Market orders shall not be accepted in pre-open session.

All outstanding orders will be moved to the normal trading session at their Limit price.

There shall be no price bands for re-listed scrips during pre-open session.

Market orders shall not be accepted in the pre-open session.

In case equilibrium price is discovered, all outstanding orders shall be moved to the normal trading session at their limit price.

In case equilibrium price is not discovered, all orders shall be cancelled and the scrip shall continue to trade in call auction mechanism until price is determined.

For IPO scrips with an issue size greater than ` 250 cr the risk management provisions as prescribed vide SEBI circular dated July 15, 2010 and letter dated September 17, 2010 shall remain applicable for pre-open session.

For IPO scrips with issue size upto ` 250 cr and Re-listed scrips it is advised that margins shall be checked and blocked for 100% of the order value at the order level itself before considering the order eligible for inclusion in pre-open session.

Source: SecMarx — Call Auction in Pre-open session for Initial Public Offering (IPO) and other category of scrips. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.