The intra-day exposure limit for members was halved in the previous settlement to contain market risks by reducing the cumulative volumes traded on the exchange. This was an additional safety measure taken over and above the restrictions on short sales imposed by Sebi to check excess price volatility on major bourses. In the interim period, the exchange has decided to raise the intra-day trading limit to 25 times the base minimum capital from the present 16.7 times.

Moreover, the exchange has decided to implement the new graded margin system announced by Sebi for volatile scrips from the commencement of the new settlement for specified group from July 10. This margin will apply to all positions in the market, but scripsbelow Rs 40 are exempt from the new margin requirements, exchange sources said.

The immediate fallout of the curbs on individual exposures was the sharp fall in volumes on CSE from around Rs 900 crore daily till the beginning of the current settlement to an average of about Rs 400 crore in the current settlement.

However, market sources are satisfied that the temporary checks on short sales have been effective in giving trapped bulls an exit opportunity in the absence of a fresh wave of short selling. The forced squaring of outstanding sales positions on the major bourses in a span of two weeks allowed bulls to cover their long positions without causing major price distortions in pivotal scrips. With the overall outstanding positions reduced, thus minimising chances of further broker defaults in a sagging market, sources said.