Mumbai - Stock exchange major National Stock Exchange of India (NSE) said that it has commenced the process to verify the credentials of firms on its platform, on whom trade restrictions were imposed by regulator Sebi.
"Sebi has directed exchanges to shift 331 companies to the Graded Surveillance Measure (GSM), Stage VI, with immediate effect. Of these 331 companies, only 48 are listed on NSE. Of these 48 companies, 10 companies were suspended prior to this directive of Sebi," the NSE said in a statement.
"Sebi has asked NSE to seek documents from these 48 companies and verify the credentials and fundamentals of these companies. The exchange has already commenced the process of collecting information, as advised by Sebi and will be reporting to Sebi after completing the exercise."
Stock market regulator Sebi had imposed trade restrictions on 331 firms which are suspected of being "shell companies" on August 7.
The aforesaid securities were placed in suspended animation from August 8, as exchanges stated that the trade in these stocks shall be permitted only once a month.
The market regulator directed major indices -- NSE, Bombay Stock Exchange and Metropolitan Stock Exchange of India -- through a letter sent late on August 7 to initiate action against stocks of these suspected firms.
The Sebi letter forwarded a list of 331 suspected "shell companies" identified by the Ministry of Corporate Affairs.
According to the letter, trade in all the 331 listed securities shall be placed, with immediate effect, in "Stage VI of the GSM" which mandates the exchange to allow trade in the identified securities only once a month under its trade-to-trade category.
It further provides that any upward price movement in these securities will not be permitted beyond the last traded price amongst additional surveillance measures.