Investors of some 1200 stocks have suffered the same fate when the shares they have dearly held got suspended from trading on the stock exchange.The reason has definitely been a valid one, non compliance with the rules of listing agreement like filing of shareholders pattern, governance report etc. for two consecutive quarters. To give shape to suspension of trade on exchange, SEBI gives a 21 day notice to the company and in case of no response from the company, the shares are suspended. Pretty cool, this is how the promoters have always had a peaceful exit from the scene and the investors are left in complete dark. Is this a just and fair compensation for the investors who have suffered losses because a company had not complied with the laid procedures and no effort has been made to lessen the loss suffered by them.
This has definitely come to the notice of SEBI and therefore a new set of rules have been framed for suspension and revocation of trading in securities.
New Theme
When a notice is issued by SEBI for suspension of securities,firstly, the shares of the promoters get frozen thereby disabling the promoters to trade in the market.Secondly, the other stocks would be shifted to a danger zone i.e. “ z” category, wherein transactions need to be settled with delivery . Once the shares are shifted in this new category , suspicion is bound to arise in the minds of the investors making them cautious and decisive.
Even after suspension, it has been decided to keep a window open for trading of the suspended shares for six months in the first trading session of every week for the benefit of those who have still not come to light.
There shall always be a possibility that the prices shall attain new lows, hence SEBI may consider doing away with the circuit filter thing, ensuring an uninterrupted trade.
Hoping the changes make the stock market a better place.