Sunday, February 14, 2010

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Categorisation of stocks for imposition of margins

Stock are classifed into three categories on the basis of their liquidity and impact cost.

  • The Stocks which have traded at least 80% of the days for the previous six months shall constitute the Group I and Group II.



  • Out of the scrips identified above, the scrips having mean impact cost of less than or equal to 1% are categorized under Group I and the scrips where the impact cost is more than 1, are categorized under Group II.

  • The remaining stocks are classified into Group III.



  • The impact cost is calculated on the 15th of each month on a rolling basis considering the order book snapshots of the previous six months. On the basis of the impact cost so calculated, the scrips move from one group to another group from the 1st of the next month.



  • For securities that have been listed for less than six months, the trading frequency and the impact cost are computed using the entire trading history of the security.



Categorisation of newly listed securities

For the first month and till the time of monthly review a newly listed security is categorised in that Group where the market capitalization of the newly listed security exceeds or equals the market capitalization of 80% of the securities in that particular group. Subsequently, after one month, whenever the next monthly review is carried out, the actual trading frequency and impact cost of the security is computed, to determine the liquidity categorization of the security.

In case any corporate action results in a change in ISIN, then the securities bearing the new ISIN are treated as newly listed security for group categorization.

Sunday, February 7, 2010

Highlights of india's Economic policies

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