SEBI : Listing and trading permission to be distinct

Securities and Exchange Board of India (SEBI)

SR. EXECUTIVE DIRECTOR

TO

ALL PRESIDENTS/ED’s OF ALL
STOCK EXCHANGES & THE OTC EXCHANGE OF INDIA

Dear Sirs,

Listing and trading permission to be distinct

It has come to our notice that at times the stock exchanges grant permission for trading for certain securities on the basis of a certificate by the concerned company that it has commenced the despatch of share certificates/relevant securities. Investors have complained to SEBI that merely commencement of despatch of share certificates/securities is not sufficient for a stock exchange to be satisfied that tradeable scrips are in the hands of the investors. If trading is commenced on the basis of an expected despatch of securities and if the securities are not received by the investors in actuality, market distortions and manipulations become possible. Under these circumstances, a question has arisen whether the permission for trading should be withheld till all share certificates/refund orders are dispatched.

You are requested to examine this matter and give us your views to enable us to evolve uniform guidelines in this regard.

Yours faithfully,
sd/-

C. B. BHAVE