Warnings issued by the Securities and Exchange Board of India (Sebi) seem to have created an impact on market participants, including the stock exchanges (SEs).Authorities at SEs have cracked down on 825 companies and shifted them either to the ‘Z’ category or to the more stringent trade-to-trade (TTT) segment. After shifting 112 securities to the ‘Z’ category on Friday, The Stock Exchange, Mumbai (BSE) on Saturday decided to shift another 555 securities to the ‘Z’ group, effective September 10, which indicates to the investors that they should exercise caution before investing in them.It has also decided to shift 23 securities to the TTT category. The National Stock Exchange (NSE) has also decided to shift 135 securities, as a risk-containment measure, to the TTT segment, effective September 10. The significance of shifting these stocks from rolling segment to this category is that the investors who wish to trade in these stocks have to take delivery every time they buy the stock and deliver the security every time they sell the security. No netting of the position is allowed. On an average, 5,261 stocks are traded on BSE under various groups, and following this development, the total number of securities in the ‘Z’ group will increase to 3,443.It may be recalled that Sebi chairman G.N. Bajpai had cautioned the public in general and retail investors in particular about the sudden spurt in the penny stocks and had asked them more than once to refrain from investing in such stocks. The Parliamentary standing committee on finance, which was on a two-day visit to the metropolis earlier this week, also expressed its concern over the rise in penny stocks in its meeting with top Sebi brass.
