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The stock exchanges are the primary regulator for detection of market manipulation, price rigging and other regulatory breaches in the functioning of the capital market. The market Surveillance is the system developed by the Stock Exchange for effective and transparent market to prevent the investor from manipulative or illegal trading practices.
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| Market surveillance= Effective & Transparent + prevention of investor from Manipulative or illegal practices. |
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| Here, exchange ensures: |
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| To provide effective and transparent trading platform to investor on the basis of equality principal i.e. every investor have equal right to participate in capital market with equality of public information. |
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| To prevent investor does trading i.e. buy and sell through exchange trading platform, in the integrity of securities markets from manipulative and illegal trading practices, under the compliance of capital market regulator in the interest of capital market. Market manipulation refers to a wide range of trading practices that distort prices and enable market manipulators to profit at the expense of other participants, creating information asymmetries. |
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| Surveillance System: |
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| Automated Surveillance system (Stock Watch System) is the tool for monitoring real-time trading patterns and generates online/offline alerts to capture the movements of price and trading volume for each security with the parameters based on preset values. So, surveillance team is able to promptly investigate for the reason of that unusual change notice any security with unusual changes in its trading pattern. These tools are able to track the positions of alleged large traders, and detect market manipulation, front-running, fraud and trade practice violations. The main objective of the Stock Watch System is to detect potential market abuses. Surveillance System generates real time alerts at a very early stage by comparing potential abnormal activity with historical data. Alerts are triggered when trading activities voilate parameters that are set on the basis of price, volume etc. |
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| Surveillance Activities: |
- Policy formulation for surveillance systems and risk containment measures at the exchange registered members and listed securities level to bring integrity, safety and stability in the ISE trading platform;
- Overseeing the trading activities of the members for the purpose of initiating timely and pro -active measures to facilitate checking and detecting suspected or alleged market manipulation, price rigging or insider trading to ensure the market;
- Integrity and fairness in trading;
- Initiating primary investigations;
- Preparation of reports as per regulatory requirements;
- Risk containment measures in the form of elaborate margining system and linking of intra-day trading limits and exposure limits to capital adequacy;
- Daily price bands to curb abnormal price behavior and volatility;
- Suspension of trading in securities to prevent market manipulation;
- Suspension of member to prevent market manipulation.
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Contact Person:
Pradeep Muduli
General Manager- Market Surveillance
Email ID: pradeepm@iseindia.co.in
Contact Number: 022-67941143
Fax Number: 022-27812061
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