Liquidity Enhancement Schemes for Illiquid Securities in Equity Cash market

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..... efore been decided to permit stock exchanges to introduce LES to enhance liquidity of illiquid securities in their Equity Cash market. 3. LES may be introduced in any of the following securities: (a) Securities having a mean impact cost greater than or equal to 2% for an order size of ₹ 1 lakh, where mean impact cost of the security on the stock exchange is calculated over the past 60 trading days. (b) Securities introduced for trading in the permitted to trade category. 4. LES may be continued till such time as the security achieves mean impact cost of less than 2% for an order size of ₹ 1 lakh on the stock exchange during the last 60 trading days. 5. Discontinuation of LES for any security shall be done after .....

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..... r segments or cash payment; (b) Shares, including options and warrants, of the stock exchange. 10. If a stock exchange chooses the form specified in Para 9a above, the incentives under all LES (both Equity Cash and Derivative Segment), during a financial year, shall not exceed 25% of the net profits or 25% of the free reserves of the Stock Exchange, whichever is higher, as per the audited financial statements of the preceding financial year. If, however, a stock exchange chooses the form specified in Para 9b above, the shares, including the shares that may accrue on exercise of warrants or options, given as incentives under all LES (both Equity Cash and Derivative Segment), during a financial year, shall not exceed 25% of the issu .....

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..... xchanges are directed to: a) take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant byelaws, rules and regulations; b) bring the provisions of this circular to the notice of the stock brokers and also disseminate the same on its website; c) communicate to SEBI the status of implementation of the provisions of this circular. 15. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Yours faithfully, Maninder Cheema Deputy General Ma .....

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