To check market manipulation through 'penny stocks', market watchdog Sebi will soon ask stock exchanges to create a new group for shares that are found to be prone to such activities. The new group may be called 'T+' and would include shares that remain susceptible to manipulative activities despite having been put in the 'T' group where trading is restricted to delivery-based trades within a small price band of up to five per cent and intra-day trades are not allowed.
The stocks in the new group could be subjected to even shorter price bands of up to two per cent, while other restrictions could be put in place to ensure that only genuine trades are permitted on those counters, a senior official said. It has been noticed that operators tend to push up the prices of T-group stocks ahead of their exit from such restricted trading categories, while the shares are dumped after luring gullible retail investors to these counters.
Sebi has already consulted stock exchanges and other stakeholders on this issue and the necessary framework for the new group would be put in place soon. The stock exchanges classify various stocks traded on their platforms into several groups such as A, B, T and Z on certain qualitative and quantitative parameters.