Market regulator Securities & Exchange Board of India (SEBI) has announced a new set of guidelines to prevent flash crashes in future.

Under its new rules, SEBI ordered stock exchanges not to accept single orders for stocks, equity derivatives, or exchange traded funds worth over one hundred million rupees. It capped single orders at around $2 million.

The capital market regulator also slashed the trading band for stocks that trade on derivatives markets too, from 20 per cent to 10 per cent. However, it allowed stock exchanges to make adjustments in the band in increments of 5 per cent depending on conditions in the market.

In addition, it directed brokerages to fix internal limits on the cumulative value of unexecuted orders, while also directing them to slash risk when 90 per cent of the security for margin trading is utilized.

However, observers are of the view that the new measures will unlikely to have an extensive impact on stock volumes, though stock markets may react at the open.

Anup Chandak, of Sharekhan, said, "There may be knee jerk reaction to this move for the market, but it would not matter a lot."

SEBI unveiled the new guidelines after an erroneous trade order of over $125 million from a broker at Emkay Global Financial Services dragged shares steeply lower in October.