8216;No manipulation in RIL shares8217;

The BSE has says this is a one-off case that need not be emphasised.

The Bombay Stock Exchange on Wednesday said there was no manipulation involved in the sharp decline witnessed in the scrip of Reliance Industries on June 1,when for a few seconds the country8217;s most valued company8217;s shares plunged over 20 per cent.

8220;After extensive review of trading of Reliance Industries RIL during this episode by the BSE,we wish to inform the market that there does not appear to have been any manipulation involved in the scrip,8221; BSE said in a statement.

On June 1,shares of RIL plunged 20 per cent in intra-day trade to a low of Rs 840.50. However,it recovered within minutes to close at Rs 1,011.55,down 3.21 per cent.

This plunge had brought down the main index Sensex by over 600 points.

The exchange said erroneously a dealer entered a large sell order of 1.6 lakh RIL shares,instead of dividing the sell order and placing it in smaller quantities.

At the time the sell order for RIL shares was entered,there were a large quantity of buy orders in the order book and the since the error happened during the market hours,those who placed their buy orders at a price lower than the market price they got the RIL shares,the exchange said.

8220;The price decline was the result of a human error,8221; it added. Since there was a dummy circuit filter of 20 per cent on the shares of RIL,which is also in the derivative segment,the fall was limited to that extent only,it said.

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As 8216;dummy8217; circuit filter was set at the price of Rs 836.05 20 per cent below previous day8217;s close and the lowest priced buy order in the order-book was at Rs 840.55,it prevented price falling further and all the balance quantity was executed at the price of Rs 840.55. The execution of the entire order took approximately 12 seconds in 1,610 separate trades with 222 counter parties.

BSE does have in place 8220;dummy8221; circuit filters of 20 per cent,even for scrips eligible for equity derivatives trading. Under the 8220;dummy8221; circuit filter logic,limit orders more than 20 per cent above or below the previous day8217;s closing price are rejected upon order entry.

8220;This is the reason that there were no buy orders on the book below 20 per cent and the reason that the price did not fall more than 20 per cent below the previous day8217;s close,due to 8216;Dummy8217; circuit filter,8221; BSE said.

Immediately,after the execution of this order at 12.50.36,the price of RIL scrip rebounded to Rs 999.50 on the BSE,it said.

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BSE trading systems worked properly during the sharp price decline and subsequent rebound and the 8220;dummy8221; circuit filter worked to limit the price decline to less than 20 per cent,as it is designed to do.