"Prior information of open position of any share during market hours can easily fluctuate the price of the share". How Preventive Surveillance helps to reduce the fraudulent price variation in the shares in a day?

Market Surveillance plays a vital role in ensuring market integrity which is core objective of regulators. Market integrity is achieved through combination of surveillance, inspection, investigation and enforcement of relevant laws and rules. Globally Market Surveillance is either conducted by the regulators or Exchanges or both. In India, the primary responsibility of market surveillance has been entrusted to Stock exchanges and is being closely monitored by SEBI. Market Surveillance is broadly categorized in two parts, viz. Preventive Surveillance and Post Trade Surveillance. Preventive Surveillance Stringent on-boarding norms for Trading members - Stringent net worth, back ground, viability, etc. checks while on boarding Trading members. Index Circuit Filters - It brings coordinated trading halt in all equity and equity derivative markets at 3 stages of the index movement, either way viz. at 10%, 15% and 20% based on previous day closing index value. Trade Execution range - Orders are matched and trades take place only if the trade price is within the reference price and execution range. Order Value Limitation - Maximum Order Value limit allowed per order. Cancel on Logout - All outstanding orders are cancelled, if the enabled user logs out. Kill Switch - All outstanding orders of the trading member are cancelled if trading members executes kill switch. Risk Reduction Mode - Limits beyond which order level risk management shall be initiated instead of trade level. Compulsory Close out - Incoming order, if it results in members crossing the margins available with the exchange, such order will be partially or fully cancelled, as the case may be, and further disallow the trading member to create fresh positions. Capital Adequacy Check - Refers to monitoring of trading member's performance and track record, stringent margin requirements, position limits based on capital, online monitoring of member positions and automatic disablement from trading when limits are breached. Fixed Price Band / Dynamic Price band - Limits applied within which securities shall move; so that volatility is curbed, orderliness in brought about. For non-derivative securities, price band is 5%, 10% & 20%. For derivative products as operating range of 10% is set and subsequently flexed based on market conditions. Trade for Trade Settlement - The settlement of scrip's available in this segment is done on a trade for trade basis and netting off is allowed. Periodic Call Auction - Shifting the security form continuous to call auction method. Rumour Verification - Any unannounced news about listed companies is tracked on online basis and letter seeking clarification is sent to the companies and the reply received is disseminated.