The Securities and Exchange Board of India on Thursday allowed all the 19 entities barred by it last Friday in connection with irregularities in certain mid-cap stocks to square off any existing positions they might have in derivatives segment.

The latest direction follows a SEBI order dated August 3, wherein it had restrained them from accessing the securities market and prohibited them from buying, selling or dealing in securities in any manner till further directions.

The regulator, however, directed the stock exchanges today “to enable squaring off existing open positions in the Futures and Options Segment, if any, for the persons/ entities mentioned in the aforesaid order, at the earliest.”

“Further, the concerned stock exchanges should also ensure that said 19 persons/entities do not take fresh positions or increase their open positions,” SEBI said.

Consequently, the BSE has asked its trading members to take note of the SEBI direction and ensure compliance.

After initial probe into share plunge of 20-26 per cent in four mid-cap stocks — Parsvnath, Tulip Telecom, Glodyne Technoserve and Pipavav Defence — on July 26, SEBI had barred 19 entities, including three individuals, from the securities market in an interim order.

The 19 entities, many of whom are found to be related to each other with common addresses and phone numbers in Kolkata, include 4a Financials Securities, A To Z Steels, Ajit Kumar Jain, Cheminare TradeComm, G N Credits and Gajria Jayna Precision Industries.

(This article was published on August 9, 2012)
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