Mumbai: Leading stock exchanges BSE and NSE will extend the pre-open call auction facility to all shares and introduce a periodic call auction for illiquid scrips from the next month following market regulator SEBI's directive.
"Exchange shall extend pre-open session to all securities with effect from April 1, 2013. Exchange shall introduce periodic call auction for illiquid securities with effect from April 8, 2013," BSE and NSE said in similar circulars.
The bourses said they would soon announce the list of securities eligible for pre-open and call-auction session.
In a call auction, buyers set a maximum price at which the shares can be bought while the sellers keep a minimum price for selling the scrips. The facility, conducted before start of trading session, helps reduce price volatility.
Currently, the pre-open call auction sessions are in place on pilot basis Sensex and Nifty shares. The 30-stock Sensex is the BSE index, while the 50- share Nifty is the benchmark of the National Stock Exchange.
Besides, it is also available for Initial Public Offering (IPO) as well as re-listed shares.
The Securities and Exchange Board of India announced last month that it would extend the pre-open call auction facility to all shares available on all stock exchanges.
At the same time, the regulator also introduced a periodic call auction sessions for illiquid shares, which are traded very infrequently in the stock exchange.
Besides, the illiquid scrips are required to be identified by the stock exchanges at the beginning of every quarter.