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SEBI yet to decide on circuit breakers

India's stockmarkets regulator the Securities and Exchange Board of India, or SEBI, has not taken any decision on scrapping circuit filters for key index stocks, its chairman said on Tuesday.

A section of the press quoting an agency report said on Tuesday that SEBI was weighing the possibility of doing away with circuit filters for stocks in the 30-share Bombay Stock Exchanges index, the Sensex, and the and 50-share National Stock Exchange index, the S&P CNX Nifty.

This was aimed at facilitating smooth trading in both the cash and derivatives markets, it said.

Trading in index-derivatives is set to commence in Indian markets soon.

SEBI chairman D R Mehta said that a risk management panel constituted by SEBI was deliberating on various risk containment measures for the derivatives markets.

"Circuit filter is one of the matters they are discussing, but no view has been taken," he said.

"SEBI has not taken any decision and even if the committee makes a recommendation, whether the view will be accepted is not certain," he said.

Earlier this month a new rule relaxing the eight per cent circuit limit to 12 per cent after a half-hour cooling period became effective for 200 select stocks.

The stocks are not allowed to move more than 12 per cent either up or down on any single day.

Though some sections of the market have been critical of the use of circuit filters saying they hamper the natural price discovery process, SEBI's view on circuit filters has been that Indian markets are not as mature and deep as other global markets to do away with the circuit filter controls.

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