What is Reverse Trade Cancellation Mechanism (RTCM)?

RTCM was introduced with a view to restrain abnormal / non – genuine transactions executed with an objective of transferring profit / loss between entities or creation of artificial volume in securities / contracts.

As per Exchange circular no. NSE/SURV/62493 dated June 18, 2024, Exchange will monitor transactions on an intraday basis, between a pair of PANs. As a new trade takes place between a pair of PANs, the quantity of the trade will get aggregated to either of the legs (First Leg or Second Leg) i.e. “First leg - where PAN “A” is the buyer and PAN “B” is the seller” or “Second leg - where PAN “A” is the seller and PAN “B” is the buyer”. At every trade instance after the above aggregation, wherever such aggregated quantity of two legs between PAN “A” and PAN “B” (i.e. first leg is where PAN “A” is the buyer and PAN “B” is the seller and second leg where PAN “B” is the buyer and PAN “A” is the seller) breach thresholds with respect to the specified parameters, the trade will be eligible for cancellation.