Standard Operating Procedure (SOP) for Stock Exchanges for suspension and revocation of trading of Shares of Listed Entities for non-compliance of Certain Listing Conditions:
For non-compliance of listing conditions,
exchanges have been suspending the trading of the shares of the listed
companies, which affected the interest of non-promoters much more than the
promoters as the exit route used to be closed for such investors after
suspension of trading. Therefore, it is now decided that the exchange in
case of non-compliant companies would resort to several other measures such
as imposition of fines, freezing of shares of the promoter and promoter group,
transferring the trading in the shares of the company to separate
category, etc., before suspending the shares of the company.
Accordingly, to maintain consistency and
uniformity of approach by the stock exchanges for taking action against
the listed entities for non-compliance with certain important listing
conditions, such as Clause 35, Clause 41, Clause 49 of the listing
agreement, SEBI vide Circular dated September 30, 2013 has prescribed
Standard Operating Procedure (SOP) for suspension and revocation of suspension of
trading
in the shares. The salient features of the
circular are as follows:
Imposition of fines (on per day basis) on
the company for non-compliance and delay in compliance with continuous
Listing condition such as submission of shareholding pattern, financial
results, corporate governance etc.,
In case of non-compliance for two
consecutive quarters, moving the shares of non-compliant company to “Z”
Category, where the trades would settled on Trade for Trade basis.
In case non-compliance continues, freezing
the shares of the promoter and promoter group. This would be carried out before
suspension of the trading of shares of the Company.
In order to provide exit window for the
non-promoters, after 15 days of suspension, trading in the shares of non-compliant
entity will be available on the "Trade to Trade" basis, on the first
trading day of every week for 6 months.
Source: SEBI
