The panel was also informed that scrip-related circuit breakers and price bands were more appropriate in tackling price flucatuations in the domestic market compared with index-related circuit breakers. Speaking on the regulatory measures taken by Sebi and the stock exchanges to stabilise the markets during the recent volatility, the officials hihglighted the stringent administration of the mark-to-market margin system and the adherance to prudential exposure norms.

The action taken by themarket watchdog and the exchanges ensured that the market remained open and only those counters where the scrips touched the lower or higher end of the daily price band of 10 per cent or weekly band of 25 per cent were closed. On the face of it, it may seem that these measures interfere with the free play of the market forces. But Sebi, in consulation with the market participants and stock exchanges, considered it necessary and appropriate to take such mesures to curb excessive speculation and volatiity. "When speculation and volatility becomes excessive, it is harmful to the interest of the securities markets and investors at large," said Sebi.

During October 28-29, 1997, when global stocks declined, the Indian market was impacted only marginally. Again during May-June 1998, the affect on the Indian markets was limited despite the adverse conditions in the Asian markets. However, due to the strict risk manangment and suveillance measures not a single broker defaulted. Neither did any lose his money as themarkets remained operational and unaffected throughout, assertd Sebi officials, adding, "This shows that the Indian markets have achieved a certain level of maturity, safety, and stability," added Sebi.

Sebi further said it had been informed by both BSE and NSE that there were some liquidity problems in respect of 11 members on BSE and 6 members on NSE.