SEBI proposes uniform price for same stock across exchanges

The Securities and Exchange Board of India – SEBI has proposed a new mechanism to prevent the same stock from trading at significantly different prices across exchanges. In a consultation paper published on its website today, SEBI said, for stocks traded on a particular exchange but inactive on another, the base price and price band must be determined on the active exchange’s closing price. For a stock that trades on more than one exchange but remains inactive on one of them, the inactive exchange should adopt the closing price from the exchange with the highest trading volume.

Currently, exchanges calculate circuit limits independently based on their own previous closing prices. In illiquid stocks, this can lead to prolonged periods of non-trading on one exchange, freezing prices and circuit limits even as the stock continues to move on another platform.

According to SEBI, this initiative is part of its broader effort to strengthen market infrastructure by improving price discovery and reducing structural inefficiencies that can hamper trading. In order to implement this system, exchanges would need to establish arrangements for sharing closing-price data.

Public comments on the consultation paper can be submitted till 2nd July.

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