What does it mean for listed companies to suspend trading?

Active suspension of trading generally means that the company holds a general meeting of shareholders, the stock fluctuates abnormally, and the company has to announce major news. Passive suspension is because the company has serious losses and risks bankruptcy, so the exchange will force the stock to suspend trading for rectification, which is a big investment risk.

1. Article 114th of the Securities Law stipulates that when the normal trading of securities is affected by unexpected events, the stock exchange may take technical suspension measures; A stock exchange may decide to suspend trading due to unexpected events of force majeure or in order to maintain the normal order of securities trading. At the same time, if a stock exchange suspends trading technically or decides to suspend trading temporarily, it must report to the securities regulatory authority in the State Council in time.

2. Suspension for listed companies, by suspending their stock trading, listed companies can get enough time to sort out relevant stock price sensitive information and issue relevant announcements, and resume trading after the announcement, reducing the loss of risks and interests. So in fact, most of the suspension measures are proposed by listed companies to the stock exchange.

3. Suspension For the majority of investors, the suspension of shares of listed companies is a necessary measure taken by the stock exchange to safeguard the interests of investors and the fairness and justice of market information disclosure, as well as to supervise the behavior of listed companies, that is, suspension is conducive to protecting investors and maintaining market order.

4. The main reasons for the stock suspension are: when the listed company has important information, such as publishing the annual report and interim performance report, convening a shareholders' meeting, increasing capital and shares, announcing the distribution plan, major mergers and acquisitions, investment and changes in equity, etc.; When the securities regulatory agency believes that the listed company needs to clarify and announce matters that have a significant impact on the company; When a listed company is suspected of violating the rules and needs to be investigated, the length of suspension should be determined according to the situation; The issuer fails to comply with the securities listing rules or the listing agreement, and the circumstances are serious; The public shareholding of the issuer's securities is insufficient; The business activities or assets of the issuer are insufficient to maintain the listing of its securities; The issuer or its business is no longer suitable for listing.