Though Sebi wantedthe circuits to be relaxed from 8 per cent to 4 per cent after a coolingperiod, it has not yet implemented it. This notwithstanding the fact thatBSE is ready with the software, which was cited as one of the reasons fornon-implementation of the move. The extreme swings in the market has had stock exchanges dithering onintroducing any relaxations in the current circuit filter system. Theprevailing mood is to continue with the system at present until the marketreturns to normal. Agreeing that the system needed to be fine tuned, Patil noted that anychanges should be introduced only after careful consideration and wideconsultations with market participants.
Fund managers hate the circuit filter system.
Their investments get blockedas soon as any scrip hits the circuit, effectively blocking their entry orexit. The fund manager of a leading mutual fund said that there was simplyno rationale in the system. Imposition of circuits restricted the freemovement of the market. Whenthe stock is at the upper circuit, driven by greed everybody places a buyorder. Arun Kejriwal of Nikko Securities feels that circuit filters cannot be doneaway with completely.