The High Council of Securities and Exchange, the top stock market policymaker, has given approval in principle to raise daily price limits in the bourse.
Spokesman of the Securities and Exchange Organization Mohammad Ali Dehqan-Dehnavi made the announcement Tuesday.
"The council approved general polices with regard to change in the daily price spread," he was quoted as saying by Securities and Exchange News Agency.
Dehqan-Dehnavi said the daily price fluctuation limit is supposed to increase "gradually and when the market is prepared and stock investors are fully informed".
In addition, increase in price spread would be accompanied by promoting financial literacy and encouraging investors to invest indirectly, i.e. through asset managers and investment funds.
The bourse council did not specify the amount stock prices can fluctuate in a trading session and assigned the job to the SEO.
Dehqan-Dehnavi said the regulator would consult financial market experts to come to a final decision regarding the issue in the coming days.
The daily price spread was ±5% during a trading session for years before the stock market regulator decided to increase the limit up price on Feb. 13 and decrease the limit down.
As per the decision, share prices ranged from -2% to +6% a day. The decision is still in force to avoid further decline in share prices and support millions of retail investors who have taken a big hit after the share market bubble burst late last year.
Riding on the back of fresh liquidity flooding the market, the main gauge of Tehran Stock Exchange, TEDPIX, jumped 300% in less than five months and crossed the historic high of 2.1 million points.
Triggered by institutional traders’ huge selloff, mostly in shares of companies affiliated to the government, the market plunged and TEDPIX crashed and lost half its value, leaving millions of retail traders in the lurch.
