The Surveillance department of the recognised stock exchange uses various tools to detect potential market abuses at a nascent stage in order to promote market integrity. In the light of this statement define the term ma

Answer 4(a) Market abuse is a broad term which includes abnormal price/ volume movement, artificial transactions, false or misleading impressions, insider trading, etc. The department uses various tools to determine normal and abnormal market behaviour. The necessary actions are initiated like imposition of special margin, reduction of circuit filters, trade to trade settlement, suspensions, de-activation of terminals, etc. to control abnormal market behaviour. The department carries out investigation, if necessary, based on the preliminary examination/analysis and suitable actions are taken against members involved based on the investigation. The detailed explanation of the various Surveillance activities are as follows: (a) Price Monitoring The functioning of the Price Monitoring is broadly divided into following activities: On-Line Surveillance Off-Line Surveillance Derivative Market Surveillance Investigations Surveillance Actions Rumour Verification Pro-active Measures (b) Position Monitoring Statement of Top 100 Purchasers/Sellers Concentrated Purchases/Sales Purchases/Sales of Scrips having Thin Trading Trading in B1, B2 and Z group Scrips Pay-in liabilities above a Threshold Limit Verification of Institutional Trades Snap Investigation Market Intelligence