SEBI may tighten trading norms for companies sent to bankruptcy court


The Securities and Exchanges Board of India (SEBI) is mulling trading restrictions on shares of companies referred to the National Companies Law Tribunal for bankruptcy proceedings.

Exchanges may either suspend trading in shares of companies facing insolvency proceedings, or transfer them to the trade-to-trade segment, sources told Moneycontrol. SEBI will discussed the matter at its board meeting on March 28, sources said.

The Ministry of Corporate Affairs (MCA) feels for companies facing liquidation, price-sensitive information may be held back from the public as their release could impact the resolution process.

“Putting such companies in the trade-to-trade segment or suspending trading in their shares will discourage speculation in these companies,” the source said.