With an aim to safeguard investors' interest, leading stock exchanges -- BSE and NSE -- have advised their members to take extra caution while trading in over 200 illiquid stocks.
Illiquid stocks are those that cannot be sold easily because they see limited trading. These stocks pose higher risks to investors because it is difficult to find buyers for them as compared to frequently traded shares.
In similar-worded circulars, both the exchanges advised their trading members "to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients".
Also Read
BSE and NSE have listed out 222 and 11 illiquid stocks, respectively, where additional due diligence is required.
Illiquid scrips listed by both the exchanges include Bilpower Ltd, Creative Eye Ltd, Todays Writing Instruments Ltd, Usha Martin Education & Solutions Ltd, Euro Multivision Ltd and Jaihind Projects Ltd.
These scrips will be traded in periodic call auction mechanism from January 8, the exchanges noted.
In December 2014, Sebi had relaxed the norms for trading in illiquid stocks. The move was aimed at shifting various illiquid scrips to normal trading session from the periodic call auction, the window where these stocks are currently traded.
Disclaimer: No Business Standard Journalist was involved in creation of this content
