In a related move, the group has also asked stock exchanges to formulate an ethics code for its directors on dealing with price-sensitive information, which comes to them ahead of general investors.

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 10 days, said the Securities & Exchange Board of India's (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 tradingand thus sets a benchmark price.

This leads to the immediate implementation of price-bands without any trading in the scrips, a phenomenon said to be unfair to investors.

SEBI has also asked exchanges like the Bombay, Calcutta, Uttar Pradesh, Delhi and National Stock Exchanges to formulate a "code of ethics" for a bourse's director.

``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 withSEBI's strict surveillance measures, the NSE and BSE 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.

About fixing the base price for price-bands in infrequently traded scrips, ISG failed to reach a consensus and so decided to refer the matter to the SEBI-appointed working group, which would submit its report within 10 days.

The committee also decided that stock exchanges should collect margins due from members before the close of banking hours by the next day of execution of a transaction.

In case of squaring-up of outstanding positions, the committee decided that under no circumstances should the member broker be allowed access to the trading terminal in the absence of a supervisory authority.