MUMBAI, April 21: The Securities and Exchange Board of India (SEBI) today decided to form a group to formulate a code of ethics for the directors and other functionaries of stock exchanges in view of allegations regarding leakage of information including from the stock exchanges.The decision to set up the group - consisting of directors from Bombay, Calcutta, Uttar Pradesh and Delhi Stock Exchanges, managing director of National Stock Exchange and SEBI - to formulate such code of ethics was taken at a meeting of the inter-exchange market surveillance group held here on Tuesday.The meeting has decided to formalise a working group of representatives of leading stock exchanges to determine a base price for price-bands to be adopted if some of the bourses remain closed on a given day. A working group, comprising representatives from Mumbai, Delhi, Chennai and the National Stock Exchange (NSE), has been asked to work out the modalities of a price-band structure if an exchange remains closed, within 10days, said SEBI senior executive director, LK Singhvi.Setting a base price during holidays is necessary. Otherwise, a particular exchange sees volatility in stock-price movements after it resumes operations as some other exchange may already have had trading and thus sets a benchmark price.``It is better if the code is framed by the users and not always by the watchdog. While doing so, however, we will ensure that the exchanges' surveillance departments are insulated even more,'' said Singhvi. In the context of the recent upsurge in the market accompanied by volatility, it was discussed that while the upsurge reflected investor interest, it also called for alertness and proactive-survelliance measures by the exchanges to ensure that market-safety and fairness were maintained.It was reiterated that exchanges through their market surveillance departments should strictly enforce margin mechanisms, price-bands and exposure limits. In an attempt to comply with SEBI's strict surveillance measures, theNatiaonl Stock Exchange and Bombay Stock Exchange have decided to implement the first phase of stockwatch system by end June this year. The Delhi Stock Exchange also intends to implement the system by August last week.
