Regulation
Illiquid
SEBI rules
Illiquid stocks SEBI rules
For illiquid stocks, SEBI / NSE / BSE apply a layered framework of trading restrictions:
| Restriction | When |
|---|---|
| Periodic Call Auction | If liquidity falls below threshold |
| T2T segment | If specific criteria met |
| 100% upfront margin | For surveillance scrips |
| Tighter price band | For specific cases |
| Lower derivative liquidity | If futures available |
Criteria for “illiquid”
- Trading days per month below threshold.
- Total turnover very low.
- Number of unique traders small.
- Spread consistently wide.
The exchange uses statistical thresholds; specifics published in SEBI / NSE / BSE circulars.
Impact on retail traders
For illiquid scrips:
- Difficult exit with size.
- Spreads wide.
- Slippage on large orders.
- Price discovery thin.
Even outside surveillance frameworks, illiquidity itself is a trading risk.
See also
- Periodic Call Auction stocks
- Trade-to-Trade segment rules
- T2T (Trade-to-Trade) stocks on Zerodha
- ASM and GSM frameworks explained
- Long-term ASM Stage 1 to 4
- Short-term ASM
- ASM stages 1 to 4 explained
- ASM (Additional Surveillance Measure) on Zerodha
- GSM (Graded Surveillance Measure) on Zerodha
- GSM stage 2+ restrictions
- Circuit filters NSE BSE
- Circuit limits / price bands
- Upper / lower circuit on Zerodha trading
- Surveillance measures and trading risks
- Suspended stock holdings on Zerodha
- What is stock suspension, process and impact
- Penny stock block (nudge) on Kite
- Large / mid / small-cap classification at Zerodha
- NSE / BSE group meanings (EQ, BE, BZ, T)
- NSE BZ category explained
- SM / M symbols (NSE Emerge / BSE SME)
- Block deal vs bulk deal on Zerodha
- Delivery volume percentage on the Kite marketwatch
- Market depth view on Kite
- Market orders blocked for long-dated options
- SEBI
- Kite Holdings tab explained
- Zerodha
- Kite (Zerodha)
External references
References
- SEBI, Illiquid stock framework, sebi.gov.in.
- NSE / BSE, Liquidity classifications, exchange websites.