When a stock is suspended, it is no longer traded on the exchanges and is not visible on Kite holdings. However, suspended stocks are displayed on Console if it's in the holdings. A stock is suspended from the exchanges due to various reasons, including non-compliance with the regulations.
Halts are typically imposed for a period of one hour, but a stock's trading may be halted more than once during a single trading day. When a stock's trading is halted at the opening of trading, the halt imposed is often only for five or 10 minutes.
The only thing delisting does is that the stock doesn't trade on whatever exchange it got delisted from. It would still exist and you would still own it. No one is going to pay you out. It would trade over the counter.
In order to reinstate trading such Suspension order need to be revoked. The process of Revocation involved submission of required documents and the pending Annual fee alongwith a Re-instatement fee decided by the Internal Committee of Stock Exchange.
Trading Suspensions
The Securities and Exchange Commisssion (SEC) is authorized under federal law to suspend trading in any stock for a period of up to 10 business days when it believes that the investing public may be at risk. A number of things can lead to an SEC trading suspension.
When suspension occurs the securities are not tradeable on the exchange until they are reinstated by the exchange to quotation.
If a delisted company can return to stability and meet the listing criteria, it may re-list later. A company may also voluntarily delist shares due to a merger or acquisition, going private, or if it feels that the costs outweigh the benefits to remain listed.
You don't automatically lose money as an investor, but being delisted carries a stigma and is generally a sign that a company is bankrupt, near-bankrupt, or can't meet the exchange's minimum financial requirements for other reasons. Delisting also tends to prompt institutional investors to not continue to invest.
If a company is delisted, you are still a shareholder, to the extent of a number of shares held. And yet, you cannot sell those shares on any exchange. However, you can sell it on the over-the-counter market. This means you can look for a buyer outside the stock exchange.
In a trading halt, orders in the system are not purged until the end of the market day while for a suspension, all orders are purged at the time of the suspension.
Note: ASX Operating Rule 16.4. 2 says that a trading halt can be applied for a period not exceeding the commencement of normal trading on the second trading day following the day on which it is requested.
Investors, here's what to do if a stock halts
The first thing you should do is look at the code associated with the halt. When a stock halts, the exchange it's listed on will provide a code that tells investors why trading is paused. Codes include: T1: News Pending.
If the stock fails to comply with the regulations of the exchanges, then it can get suspended. When such a situation arises, the stock can't be traded on the exchange and you won't be able to see them on the app or on the website. There is a list of suspended stocks on both BSE and NSE's website.
The primary difference between delisting and trading suspension is that delisting is a permanent removal of a company's shares from a stock exchange, while trading suspension is a temporary halt in trading.
What happens when an investor maintains a short position in a company that gets delisted and declares bankruptcy? The answer is simple: The investor never has to pay back anyone because the shares are worthless. Companies sometimes declare bankruptcy with little warning. Other times, there is a slow fade to the end.
The value of shares doesn't automatically rise or fall with a delisting, but when an involuntary listing takes place, it's often a sign that a company is approaching bankruptcy. In this case, there's a chance investors might lose their investment.
Regardless of the reason, if a stock is halted, the options on the underlying stock will also be halted on the option exchanges on which it trades.
You can use a capital loss to offset ordinary income up to $3,000 per year If you don't have capital gains to offset the loss. You can take a total capital loss on the stock if you own stock that has become worthless because the company went bankrupt and was liquidated.
However, under the new proposal, companies that fail to meet the $1 minimum for 360 consecutive days will be suspended from trading, even if they have appealed the delisting decision.
When a stock is delisted, options trading on that stock typically ceases. This means that options holders are no longer able to buy or sell their options on the open market. However, they still have the right to exercise their options if they choose to do so.
If someone misses applying for the delisting, they can tender the shares offline directly to the company, and the company will buy them back. Shareholders will have a one-year period from the date of unlisting to tender the shares to the company.
Overnight interest fees and short borrowing fees are still charged for suspended/delisted shares as we still pay these fees to our trading partners. These positions will remain open until the shares are declared worthless, or its residual value is liquidated and paid out.
The answer is usually no, but there are vital exceptions. Shareholders have an ownership interest in the company whose stock they own, and companies can't generally take away that ownership.
Common Reasons for a Stock Halt
Major corporate transactions (such as a merger or acquisition, restructuring, etc.) or news. Significant information (negative or positive) about the company's products or services. Regulatory developments that may affect the company's ability to do business.