Friday, February 4, 2011

Interesting Links-20 (04/02/2011)

New SEBI initiatives:
a) Planning to introduce call auctions in the proposed SME Bourse.[Link] The idea of setting up of separate bourse for the SME (less than Rs 25 crore) has been coined by SEBI in the mid of 2009. It will soon be implemented. As we all know, that these SME stocks trade very infrequently on the bourses. To correct it and encourage more trade to happen SEBI is mulling over to implement continuous call auctions (each running for 15 minutes) all along the trading hours. 
b) 'Ring Fence' to prevent flash crashes [Link]. It is still in our memory, during the last may (2010) Dow dropped by 700 points without any major news purely due to some technical snag at the HFT desk of a prominent investment bank. At that time, (not on same day) some miss trading caused the plunge in RIL scrip on Indian bourses. These flash crashes generally occurs when the large market order interacts with a thin order book. These large market order influence the price, the effect of which will be multi-fold as it feeds into automated trading systems (HFT).

Macro Economy
An interesting piece on the impact of monetary policy in Business line. [Link]

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