Objective: To enhance investor protection and curb speculative trading in small-cap and micro-cap stocks with market capitalization under ₹1,000 crore.
%20(500%20%C3%97%20280%20px)%20(500%20x%20300%20px)%20(13).png "SEBI and Stock Exchanges Revise Surveillance Framework for Small-Cap Firms")
Key Revisions:
a) Increase in volume traded
b) Decline in promoter holding
c) Positive close-to-close price trend over the past 3 months
d) Average daily turnover above ₹5 crore
Answer: c) SEBI added a 3-month positive close-to-close price trend as a new condition, along with high-low price variation, to better catch suspicious price movements.
- Stage 1 Shortlisting: Now includes a positive close-to-close price trend over the last 3 months, in addition to high-low price variation.
- Stage 2 Criteria: Introduces a PE ratio filter—only stocks with PE up to 2× Nifty 500 PE qualify, targeting overvalued or loss-making firms.
- Trading Restrictions: Stage 1 stocks face 100% margin from T+2, trade-for-trade settlement, and a 5% price band (or 2% if already applicable).
- Impact: The update benefits 28 companies currently under surveillance and aims to balance market integrity with growth opportunities for quality small-caps.
Question:
Q.1 According to SEBI’s updated Stage 1 shortlisting norms, which new parameter is added to flag high-risk small-cap and micro-cap stocks?a) Increase in volume traded
b) Decline in promoter holding
c) Positive close-to-close price trend over the past 3 months
d) Average daily turnover above ₹5 crore
Answer: c) SEBI added a 3-month positive close-to-close price trend as a new condition, along with high-low price variation, to better catch suspicious price movements.
