Advance Price Band (APB)
With introduction of the GSM framework and Additional Surveillance Measure, a need has been felt to rationalize and align the surveillance frameworks implemented pro-actively by the Exchange, in a phased and orderly manner.

Accordingly, in order to maintain the market integrity and curb excessive price movement in the securities listed / traded exclusively on BSE Trading Platform, a new surveillance framework viz. Advance Price Band (APB) Framework is being introduced by the Exchange. This framework shall be applicable on securities shortlisted based on pre-defined objective criteria covering Average Market Capitalization, PE Multiple, number of price band hits.

Under the APB Framework, additional periodic limits viz. Monthly and Quarterly limits based on the applicable daily price bands shall be applicable. The said periodic limits and calculation of price bands are given below:

Based on the daily price band the monthly and quarterly APB shall be as follows:

Daily Price Band Slab Monthly Limit Quarterly Limit
% Upper Lower Upper Lower
20 2X 0.5X 3X 0.3X
10 1.6X 0.6X 2X 0.5X
5 1.3X 0.75X 1.6X 0.6X
2 1.2X 0.8X 1.3X 0.75X

X= the close price of the stock preceding the date of applicability

Example: A stock triggers to be placed in APB Framework w.e.f. May 2, 2018 and applicable daily price band is 10 % then the periodic limits shall be:

Daily Price Band Slab Monthly Limit Quarterly Limit
Upper Lower Upper Lower
10 1.6X 0.6X 2X 0.5X
X = Close price as on April 30, 2018 i.e. Rs. 100 Rs.160 Rs.60 Rs.200 Rs.50

A security placed in APB Framework shall remain in the framework for a minimum period of 90 calendar days and shall be eligible to move out if it does not qualify the criteria thereafter.

To take into account the overall movement in the market, a factor equivalent to "S & P BSE Midcap Index" OR "Sectoral Index" movement (subject to minimum 2% movement) shall be applied to the applicable monthly and quarterly periodic limits. This factor shall be added in the direction of index movement (rounded off to the nearest number) whereas threshold of the opposite direction will remain unchanged.

A brief primer on Advance Price Band (APB) mechanism and related rules is given as under.
  • APB Framework shall be applicable in addition to and in conjunction with the daily price band framework.
  • On daily basis, the Exchange shall compute individual lower and upper price limits for the periods (daily /monthly/ quarterly). Based on this, the Final Upper DPR (Daily Price Range) and Final Lower DPR shall be arrived based on the following rule
    • Final Upper DPR shall be the "Minimum of all individual Upper Price limits"
    • Final Lower DPR shall be the "Maximum of all individual Lower Price limits"
  • The reference price for setting up the daily and APB based price limits shall be as follows:

    Price Band Reference Price Remarks
    Daily Previous closing price Whenever there is no trading on the relevant day, previous close price as available shall be considered as a reference price.
    Monthly Close price of last trading day of the preceding calendar month.
    Quartely Close price of last trading day of the preceding calendar quarter.
    * For the newly added securities under APB Framework, Close price of first trading day will be the base price for the calculation of Monthly & Quarterly APB Framework w.e.f next trading day till respective month end /quarter end.
  • APB Limits shall be calculated on the basis of current daily Price Band. For example If daily price band of the security is 10% then the Monthly and Quarterly price limits shall be:

    1.6X 0.6X 2X 0.5X
  • For securities where corporate action is effected, upper & lower APB limits shall be adjusted appropriately.

    The Advance Price Bands as may be applicable for next trading day shall be made available on EOD.

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