New Delhi: SEBI may soon frame a policy for the stock exchanges to go through a stress test to prepare them for handling 'flash crash'-like situations, where a sharp plunge in some stocks leads to across-the-board panic sale.
The market regulator is currently working out a policy on the stress test for the stock exchanges, as well as other market infrastructure institutions like clearing corporations, a senior SEBI official said.
The proposed stress test would prepare the bourses for handling situations where any sharp fall in share prices of one stock, possibly because of a freak or wrongly-entered trade order, can result in panic-selling by investors.
