What is Trade Annulment

Trade annulment means to eliminate the erroneous or wrong trade in stock exchange. In India, SEBI is ready to make strict rules for preventing all illegal and fraud activities relating to the trading of shares. But SEBI also wants to reduce its effect on stock market. SEBI has given the directions to stock exchange to void all trade which are relating to market manipulation and fraud only. 


SEBI Policy Relating to Trade Annulment :-  

• Big or Small trade in any Indian stock exchange will be void under exceptional circumstances such as fraud.
• The Regulator asks exchanges to define circumstances under which request for trade annulment shall be entertained. 
• SEBI calls for exchanges to adopt time-bound approach to decide upon cases before they make final settlement. 
• Stock exchange will examine the cases of fraud and apply penalties.
• In normal circumstances, indian stock exchange has no right to trade annulment. It will be risky because if any trade is void in normal case, trust of investors in stock market  will decrease. So, new measurement of trade annulment will be only exceptional situations.