What is the suspension of the stock symbol?
The market supervisor has the authority of a traffic officer and may suspend a symbol for various reasons. The meaning of suspending a symbol is to prevent its trading for more than 5 working days.
The Iranian stock market includes a set of terms that anyone who plans to participate in this market should be somewhat familiar with these terms. These terms are usually derived from a capital market law. The rules that every company admitted to the stock exchange must follow, otherwise the market supervisor who plays the role of a traffic officer can stop the trading of that company's symbol in the market.
The suspension of trading of a symbol or the entire process of suspension is one of the terms that shareholders must have sufficient and necessary familiarity with and know about its details, otherwise the symbol in their portfolio may be suspended for a long time and they do not know that What is the reason for this stop?
What does the suspension of the stock symbol mean?
The suspension of the symbol is one of the duties of the market supervisor. The suspension of the symbol, according to the definition given in the latest instructions of the stock exchange organization, means that the market supervisor, through an announcement, prevents the trading of a symbol for more than 5 working days. Of course, there are some exceptions that are made with the opinion of the market supervisor.
Is it possible for an icon to be suspended for a long time?
Yes, it is possible for a trading symbol to be subject to the suspension process for a longer period of time. As an example, Iran's meter manufacturing company with the symbol Accentor has been suspended since 2015, or rather, it is suspended.
What are the reasons for suspending an icon?
There may be specific reasons for the suspension of an icon, which we will mention below.
Failure to timely disclose important information by the publisher
Before explaining this, it should be said: the publisher means the same company whose symbol is being traded in the market. Every company may have important information during its existence in the capital market. Important information includes important information A and important information B. If this information has an effect on the profitability of the company, it is type A, and if it does not affect the profitability of the company, it is type B. The company is obliged to publish this information on time for the information of the general shareholders. If this does not happen and the company does not disclose them in time, the supervisor can suspend the transactions of the mentioned symbol.
Fraud or manipulation of published information
According to the rules and regulations of the Securities and Exchange Organization, companies must publish their information and financial statements. Company information is published monthly, quarterly and annually. If for any reason the supervisor determines that fraud or manipulation has occurred in this information, he can suspend the company's symbol.
The need to check the information transparency status of the publisher
Sometimes it may be necessary to check the transparency status of the information published by the publisher. This means that the company has disclosed the information on time, but this disclosure does not have the necessary and sufficient transparency. This lack of transparency causes the market supervisor to suspend the symbol to prevent violations and rents. After that, the supervisor asks the company to clarify this disclosed information and to state exactly what happened in the company. In general, if further investigations are needed, the supervisor can subject the trading symbol to the suspension process and ask the company to make the necessary clarifications in this regard.
How long is the icon suspended?
If any of the above cases happen, according to the law, the market supervisor can initially suspend the trading of the symbol for 10 days. If the clarification made by the company was accepted by the stock exchange organization and the supervisor accepted, the trading symbol of the company will be reopened the next day, but if this clarification is not convincing, the market supervisor can suspend the symbol for two periods of 10 days.
Also, the company can request a deadline from the stock exchange organization and clarify.
If the clarification is not accepted by the stock exchange organization, the stock exchange organization may agree to reopen the symbol; But a form informs the shareholders through brokers that the transaction is under caution. This means that this symbol can be suspended again at any moment.
What is included in the suspension process?
Sometimes a symbol may be subject to a suspension process, which is different from symbol suspension. In the case of the suspension process, the company's symbol is traded on the stock exchange as normal, but it is a kind of warning for that symbol to leave this process. If this process continues, the icon will be suspended.
What are the reasons for being suspended?
In articles 38 and 39 of the securities acceptance guidelines, it is mentioned that failure to comply with at least three of the following requirements in the stock market will cause the company to enter the suspension process:
Registered capital
The ratio of equity to total assets
Positive net cash flow from operations in the last two financial years
Number of shareholders
Having at least one marketer
Percentage of free floating shares
Giving a suitable opportunity to the companies subject to the suspension process is one of the solutions of the stock exchange organization so that the listed companies can remove themselves from the list subject to the suspension process at a certain time. They must take the necessary measures to resolve the ambiguities of the instructions within the specified time, and after this deadline, the mentioned symbol will be suspended.