Price Bands for COMMENCEMENT/ RECOMMENCEMENT OF
TRADING OF SECURITIES.
Currently, the stock exchanges have a policy for imposition of price band on first day ofcommencement/recommencement of trading in respect of cases of merger, de-merger,amalgamation, capital reduction, scheme of arrangement, revocation of suspension,direct listing on another stock exchange while being listed on one exchange.
II. SEBI has received representations expressing concerns of effect of price band on price discovery in cases of merger, de-merger, amalgamation, capital reduction and scheme of arrangement.
III. In consultation with the stock exchanges, it has been decided that in cases of merger, demerger,amalgamation, capital reduction, scheme of arrangement, in terms of the Companies Act and/or as sanctioned by the Courts, in cases of rehabilitation packages approved by the Board of Industrial and Financial Reconstruction under Sick Industrial Companies Act and in cases of Corporate Debt Restructuring (CDR) packages by the CDR Cell of the RBI, there is no need to have a price band on the first day of
commencement/recommencement of trading. The price band may be retained in all
other cases on the first day.
IV. Applicability
The above policy may come into force with immediate effect.
V. Direction to Stock Exchanges
Stock Exchanges are advised to give effect to the abovementioned policy and
communicate to SEBI, the status of implementation of the requirements of this circular in the next Monthly Development Report.
ISD/SR/Circ/120185/2008
March 12, 2008
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