BSE to introduce new functionality to prevent self trades

The BSE will introduce a new functionality in equity, currency and equity derivatives segments to prevent self trades.

The change will be implemented initially in the equity derivatives segment in the next few weeks. The exact date would be communicated shortly.

In a circular, BSE said it “proposes to introduce a new functionality in equity, equity derivatives and currency derivatives segments with respect to prevention of self trades’’.

Self-trades do not result in change of ownership as the buyer and the seller are the same. There has been an increase in such trades, with the aim of creating artificial volumes to manipulate prices.

Currently, there is no prohibition on self-trades — they are not always fictitious in nature and are part of normal trading activity.

However, the Securities and Exchange Board of India takes action against entities doing this with mala fide intent under its Prohibition of Fraudulent and Unfair Trade Practices regulations.

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