New Delhi: Tightening its surveillance mechanism to check share price manipulations, top stock exchange BSE has decided to follow a stricter process to scrutinise the auditor certificates provided by listed firms regarding their preferential allotment of shares.
In case of any discrepancies observed in the auditor certificates, the same shall be viewed seriously, including referring of the case to auditing regulator ICAI, BSE said in a new circular to its trading members. The markets regulator Sebi in the past has passed several orders against the persons and companies concerned in relation to unusual price movements vis-a-vis preferential issue price and weak financials of the company.
Besides, BSE has also suspended trading in shares of various companies on account of surveillance reasons. In its circular, BSE said it has been noticed that there has been substantial increase in manipulation /abrupt movement in the prices of securities wherein common modus operandi is through the route of preferential allotment.
“While the exchange, from time to time, has taken requisite steps to detect and contain such instances, it is felt necessary that further pre-emptive measures should be adopted to curtail misuse of the exchange’s system,” BSE said. BSE said it will continue to adopt various surveillance measures such as reduction in price band and suspension in the trading of securities while a new process would be adopted for suspension and revocation of such companies.
Shareholders flag concerns on NSE IPO
As pressure continues on National Stock Exchange (NSE) to get listed, at least two minority shareholders have flagged their concerns about constitution and terms of reference of the proposed Listing Committee.
Expressing its intent to get listed, the exchange has announced a Listing Committee to engage with the stakeholders on its self-listing agenda and seek their support for its stand against any kind of regulation by any other bourse.
As per Sebi norms, an exchange can not get listed on its own platform and it must go to another exchange for listing.