SEBI Tightens Surveillance on Pre-Open IPO Sessions with New Measures

Markets regulator SEBI introduced new surveillance measures for stock exchanges to curb misuse of the pre-open call auction session for IPOs. The session will now last 60 minutes with specific time allocations for various activities. SEBI aims to enhance transparency and prevent price manipulation during these sessions.

In a significant move, markets regulator SEBI on Thursday unveiled additional surveillance measures aimed at curbing the misuse of pre-open call auction sessions for initial public offerings (IPOs). The new session, lasting 60 minutes from 9 am, will be structured with specific intervals for order entry, order modification, order cancellation, order matching, and trade confirmation.

The regulation will utilize a system-driven random closure mechanism in the final ten minutes of the order entry period, designed to enhance the discovery of opening prices by aggregating supply and demand data for the involved stocks. SEBI's commitment to transparency will see stock exchanges implementing comprehensive surveillance to prevent manipulation.

Stock exchanges are mandated to generate alerts based on various parameters and provide detailed reports to SEBI by the end of each trading day. Displaying cancelled orders information in real-time for investor decision-making, this framework will be effective from the 90th day post-circular issuance.

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