The Securities and Exchange Board of India (SEBI) is the regulatory authority established under the SEBI Act 1992 and is the principal regulator for Stock Exchanges in India. SEBI’s primary functions include protecting investor interests, promoting and regulating the Indian securities markets. The BSE and the National Stock Exchange of India (NSE) regulate with suspension of trading at stock exchange.
Suspension of trading is one of the redlines for any stock exchange. It is basically a temporary shutdown because of non-compliance with the regulations of the exchanges
Table of Content
- What does Suspension of Trading at Stock Exchange Mean?
- What are the Reasons for Suspension of Trading at Stock Exchange?
- What is the Difference Between Trading Halt and Trading Suspension?
- How to Check the Status of Suspension Status of Companies?
- FAQs on Suspension of Trading at Stock Exchange
What does Suspension of Trading at Stock Exchange Means?
Suspension of trading, as the name suggests, means that an exchange has temporarily halted trading in a particular stock or other security. Suspension of trading stock exchange is the process by which a stock exchange is closed, either temporarily or permanently. During this period there are no new trades accepted. The National Stock Exchange of India (NSE) regulates with suspension of trading stock exchange.
What are the Reasons for Suspension of Trading at Stock Exchange?
The companies may be suspended at stock exchange for any of the following reasons:
- Non-compliance with regulation 55A of the SEBI (Depositories and Participants) Regulations
- Some crucial information is to be released about the company issuing stocks
- Involvement in misleading or unlawful activities
- Non-compliance with the crucial clauses of the Listing Agreement
- Non-compliance with the regulations of the exchanges
When such a situation arises, the stock can’t be traded on the exchange.
What is the Difference Between Trading Halt and Trading Suspension?
Trading halt is an interruption of trading in a company’s securities requested or directed pending disclosure of information under the Listing Rules and extending for no more than two trading days. Where a trading halt exceeds two trading days, it will automatically become a trading suspension. Trading suspensions are useful for protecting investors by pausing trading activity till the severe questions raised about the company are resolved.
How to Find the Suspension Status at Stock Exchange of Companies?
You can check the status of Stock Trading Suspension for FREE using MCA (Ministry of Corporate Affairs) website or InstaFinancials or any other websites.
Please find the steps mentioned below to verify the status of stock trading suspension:
- Visit InstaFinancials
- Search the Company by Name or CIN
- Select the relevant company name from the drop down
View the Status of Suspended at Stock Exchange for free for any of the 26 Lakh companies.
FAQs on Suspension of Trading Stock Exchange
How Does Suspension of Trading Stocks Affect Investors?
When an exchange announces a trading suspension, the company in question is no longer allowed to trade stocks in that exchange for a certain time which depends on the reason for the suspension. It means that neither brokers nor investors are allowed to deal in such stocks as long as the suspension remains active. In such a case, different types of investors are affected differently.
Can Revocation of Suspended Stock Exchange Possible?
Yes, a suspended exchange can become unsuspended again. The Revocation of suspension is subjected to the companies further complying with the procedure and all extant norms prescribed for revocation of suspension. Suspension on the shares can be revoked if the company manages to comply with all the regulations of the exchanges.
Can Exchange Stock Trading Stop Completely?
If the non-compliant entity fails to adhere to rules within 6 months from the date of suspension, the process of compulsory delisting of the non-compliant listed company can take place.
Does Suspension of the Shares Have an Influence on its Value ?
The suspension of the shares will have an influence on its value, however, it does not exactly mean that the value of the stock will turn zero. On some rare occasions, a sudden drop in the stock prices has also been observed after the lifting of the suspension.
With the above discussion we have covered – What is suspension of trading stock exchange means , The reason for suspension of trading stock exchange, some Examples of suspended stock exchange, and commonly asked questions about it.