New Delhi: The National Stock Exchange of India Ltd (NSE), India's largest stock exchange, has warned stock brokers against fulfilling orders that appear to be non-genuine, causing a deviation in the regular price discovery process.
This comes after a 'fat finger' trade on Thursday on the National Stock Exchange's (NSE) futures segment, which may have resulted in a loss of Rs 200-250 crore to a brokerage company. This could be the largest trading blunder in the history of the home market. A 'fat finger' trade is an erroneous action caused by hitting the wrong key in the market. The NSE issued a circular asking its trading members to refrain from entering or executing transactions that appear to be nongenuine on their own account or on behalf of their clients, as well as from engaging in practises that cause order book anomalies.
They have been told to put in place suitable internal systems and procedures to ensure that such orders/transactions, including algorithmic trades, don't end up on the exchange's trading system. "Non-compliance with the circular will result in appropriate disciplinary action...which may entail trading terminal deviation," the NSE said. Few trading members have made orders on the exchange platform at prices that do not reflect the current market price and are far distant from the last traded price, the exchange said.
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