Before the D-Day, SEBI, bourses go for dress rehearsal

On the day of Union Budget 2017, the markets may show unusual volatility in the market movement and volume. To manage it efficiently, securities and exchange board of India (SEBI) has asked Exchanges to enhance their surveillance and risk management system on February 1, 2017.

As per the reports, the surveillance and risk management systems have been reviewed in detail to deal with any eventuality arising due to high volatility and to control any such manipulative market activity.

The regulator has also asked Reserve Bank of India and other institutions to ensure smooth payment process and other market activities on Wednesday.

During Wednesday's budget speech, Union Finance Minister Arun Jaitley may come up with many proposed plans and schemes which will certainly boost the movements of infrastructure, power, education, auto, agriculture and banking shares, among others which will triger huge volatility in market. Being prepared in advance will make it easier for the Exchanges to deal with such scenario.

The regulator, on the other hand, has also suggested Finance ministry to reduce securities transaction tax (STT) on stock trading which is currently ranging from 0.017 to 0.125 per cent. It has also talked about decreasing the period of holding with respect to long term debt fund from 36 months to 12 months with an increase in investment limit in equity linked savings schemes (ELSS) from 1.5 lakh to 2 lakh.