The securities in Trade for Trade segment are made available for trading under T or XT Group. The settlement of securities available in these groups is done on a trade for trade basis and no netting off is allowed. Currently, under the surveillance action whereby securities are transferred for trading and settlement on a trade-to-trade basis is reviewed monthly. These criteria for shifting securities to/from Trade for Trade segment are decided jointly by the stock exchanges in consultation with SEBI and reviewed periodically.
With a view to rationalize the criteria of shifting of securities to/from Trade for Trade Segment and to bring it in line with the current market dynamics, SEBI and Stock Exchanges after deliberation and discussions have decided to revise the criteria and periodicity for trade for trade review.
Henceforth, the process of identifying the securities moving to Trade to Trade will be done on a fortnightly basis while securities moving to/from Trade to Trade will be done on a quarterly basis.
Fortnightly Review Criteria :-
The detailed fortnightly review criteria for shifting of securities to Trade for Trade segment is given below. The securities satisfying all the Criteria I, II and III shall be transferred to Trade for Trade segment.
Ø Criteria I
o PE Multiple Criteria
- If SENSEX PE Multiple on the relevant date is in the range of 15-20 then securities having PE greater than 30 will be considered.
- If SENSEX PE Multiple on the relevant date is greater than 20 or less than 15 than difference will be rounded off to nearest number and same will be added subtracted from 30. However, minimum base of PE Multiple shall be 25. Accordingly securities having PE greater than this bench mark will be considered.
- Methodology of Calculation of Securities PE
- For the purpose of calculation of PE, summation of quarterly profit figures of latest four trailing quarters available with the Exchange out of last five financial quarters will be considered. If less than four trailing quarterly results are available then the profits shall be annualized for PE calculation.
- All securities having PE <= 0 shall be considered.
AND
Ø Criteria II
- Price Variation Criteria
All securities where the price variation is in positive direction as below will be considered:
- 25% plus S & P BSE 500 / Sectorial Index variation subject to a minimum of 10%. (*In case a particular Sectorial Index is available only on one exchange the other exchange shall also use the same to compare price variation in securities of the concerned sector for the purpose of shifting to Trade for Trade segment).
AND
Ø Criteria III
Market Capitalization of Rs.500 crore or lower as on relevant date.
Exemptions
o Securities with Dynamic Price Bands.
o Newly listed securities (IPO) and the securities which are made available for trading in Trade for Trade segment for the first 10 trading days with applicable price band, while keeping the price band open on the first day of trading as per SEBI circular bearing no SEBI/Cir/ISD/1/2010 dated September 2, 2010.
o Securities transferred out of T2T settlement to Rolling settlement as per quarterly T2T Review Exercise will not be considered in immediate following fortnightly T2T review for shifting it back to Trade to Trade.
Quarterly Review for shifting securities to / from Trade to Trade:
The securities satisfying any of the following category A, B, C or D shall be transferred to Trade for Trade segment.
Ø Category A:
o PE Criteria
o If S& P BSE SENSEX PE Multiple on the relevant date is in the range of 15-20 then Securities having PE greater than 30 will be considered.
o If S & P BSE SENSEX PE Multiple on the relevant date is greater than 20 or less than 15 than difference will be rounded off to nearest number and same will be added / subtracted from 30. However, minimum base of PE Multiple shall be 25. Accordingly Securities having PE greater than this bench mark will be considered.
o Methodology of Calculation of Securities PE
For the purpose of calculation of PE, summation of quarterly profit figures of latest four trailing quarters available with the Exchange out of last five financial quarters will be considered. If less than four trailing quarterly results are available then the profits shall be annualized for PE calculation.
o All scrips having PE <= 0 shall be considered.
AND
o Volatility
Volatility greater than three times S& P BSE SENSEX volatility over a period of six fortnights.
AND
o Price Variation Criteria
All Securities where the price variation is in positive direction as below will be considered:
o 25% plus S& P BSE 500 / Sectorial Index variation subject to a minimum of 10%. (*In case a particular Sectorial Index is available only on one exchange the other exchange shall also use the same to compare price variation in securities of the concerned sector for the purpose of shifting to Trade for Trade segment)
OR
Ø Category B:
o PE Criteria
o If S&P BSE SENSEX PE on the relevant date is in the range of 15-20 then Securities having PE multiple greater than 0 but <= 30 will be considered.
o If S& P BSE SENSEX PE Multiple on the relevant date is greater than 20 or less than 15 than difference will be rounded off to nearest number and same will be added / subtracted from 30. However, minimum base of PE Multiple shall be 25. Accordingly Securities having PE greater 0 but less than this bench mark will be considered.
o Methodology of Calculation of Securities PE. For the purpose of calculation of PE, summation of quarterly profit figures of latest four trailing quarters available with the Exchange out of last five financial quarters will be considered. If less than four trailing quarterly results are available then the profits shall be annualized for PE calculation.
AND
o Volatility
Volatility greater than three times S& P BSE SENSEX volatility over a period of six fortnights.
AND
o Price Variation Criteria
All Securities where the price variation is in positive direction as below will be considered:
o 50% +/- S& P BSE 500 / Sectorial Index variation. OR
Ø Category C:
o Market Capitalization
o Criteria C shall be applicable to Securities having market capitalization less than 2 times of the market capitalization arrived at for the review.
o Market capitalization threshold shall be linked to the S&P BSE SENSEX movement between December 1, 2003 (taking base as Rs. 200 Cr on Dec 01, 2003) and present quarterly relevant date, after rounding off to the nearest Rs. 50 Cr of higher of S&P BSE SENSEX movement.
o Volume Variation
Average daily volume variation two fortnights over a previous two fortnight greater than 200% + Average volume variation of S & P BSE 500 constituents. (Computed as average of average volume variation across the constituents as on relevant date, rounded off to the nearest 5%), subject to minimum of 200%. (Average daily volume in the recent month being more than 1000 shares).
AND
o Concentration Criteria
o Concentration (Gross Purchase plus Gross Sales) of top 10 Clients on the basis of PAN Number during the month greater than 25%.
AND
o Price Variation Criteria
All Securities where the price variation is in positive direction as below will be considered:
o 25% plus S& P BSE 500 / Sectorial Index variation subject to a minimum of 10%.
OR
Ø Category D:
o Number of non-promoter shareholders less than 500 as per the latest shareholding pattern available with the Exchange.
(*In case a particular Sectoral Index is available only on one exchange the other exchange shall also use the same to compare price variation in securities of the concerned sector for the purpose of shifting to Trade for Trade segment).
Dropping Criteria:
To the securities selected according to the above four Category, the following dropping criteria will be applied if they has a Market Capitalization of more than Rs.500 Crs on the relevant date :
(a) The companies having record of paying dividends in last two years out of three years (in case a company has issued bonus shares (and no dividend) ) shall be excluded. As companies can declare results till six months from the date of year ending, any declaration regarding dividend payment received by the Exchange will be considered as dividend paid. OR
(b) Securities having Institutional holding of more than 20%. OR
(c) Securities with Dynamic Price Bands will be excluded. OR
(d) Initial Public offers - IPOs having a market capitalization of more than Rs. 500 crores will be given benefit of the dropping criteria pertaining to past dividend record till such time that they declare their first annual results.
v Securities transferred to T2T settlement as per immediate preceding fortnightly T2T Review Exercise will not be considered for review for shifting it back to Rolling Settlement.
Exemptions:-
Newly listed Securities (IPO) and the securities which are made available for trading in Trade for Trade segment for the first 10 trading days with applicable price band, while keeping the price band open on the first day of trading as per SEBI circular bearing no SEBI/Cir/ISD/1/2010 dated September 2, 2010.
A calendar detailing the dates for reviewing securities to be shifted into and out of Trade for Trade segment will be intimated in due course.
In case, trading members require any clarification, they may please contact any of the following officials of the Exchange:
Mr. Yogendra Daxini (Extn: 2272-5092)
Ms. Saji Sunilkumar (Extn: 2272-8497)
For & On behalf of BSE Ltd
(Usha Sharma) (Sachin Shinde)
Add.General Manager, Asst. General Manager,
Surveillance Surveillance
December 16, 2016.
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