The
3 stocks that were suspended from trading for irregularities will resume
trading today but as designated stocks. What it means is that trading is
restricted. Sellers can only sell the stocks if they already owned the stocks,
or no short selling. Buyers must pay cash out front.
SGX
is viewing this episode seriously and would not hesitate to introduce more
control measures to prevent it from happening again. SGX has a responsibility
to regulate the market, to prevent big syndicates/funds to manipulate the
market to their advantage. A fair trading system and a level playing field are
two of the fundamental principles that SGX has to guard zealously. Failing to
do so is not only irresponsible but will kill the market in the long run. A
stock market cannot be rigged to favour any party, big or small. No one is to
be allowed special advantage like hooking their computers into the SGX system
to have pre knowledge or advanced information that other traders did not have.
This is cheating and allowing it is to condone cheating.
Churning,
cornering of stocks, buying and selling without change of ownership, this could
be done with a few parties swapping the stocks to deceive the regulators,
creating a false market like ramping up stocks or selling down a stock, etc etc
are offences under the SGX regulations for fair trading. Violating any of these
is a serious offence. SGX is always on the look out to ensure that no such
malpractices take place in the market.
There
are bound to be incidents of such nature in the market. The question is how
prevalent and what the SGX is doing about them? How fair and level is the
playing field to the small investors? If the market is unfair, if there is no
level playing field, if all the above is violated and taking place, who should
be responsible?
The
events surrounding the 3 suspended stocks, and many stocks would have led to
many red flags being raised. Was anyone watching or anyone noticing that the
red flags were raised?
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