Tehran, March. 11 (SENA) - An official with the Iranian financial regulator, Securities and Exchange Organization, has unveiled a new model that would lessen the closure duration of ticker symbols in the stock market.
Authorities happen to ban the trading of shares of some companies under certain circumstances in case the companies fail to be transparent enough. Several banks and companies have already banned from trading their shares in the Tehran Stock Exchange in the past months due to failure in providing certain data to the regulator. Critics, however, argue that some ticker symbols have remained closed for quite a long time, damaging the indices.
Mohsen Khodabakhsh, who is in charge of monitoring exchanges, told SENA that the new model seeks to minimize the closure duration of ticker symbols. However, he warned, shareholders will be responsible for any possible loss if they continue trading the shares of the troubled companies.
The new model is yet to be finalized as it needs to be ratified by the SEO’s board.
SEO officials have been using the method as a disciplinary measure to make sure that companies comply with the latest standards and regulations.
“Under the new model, we close a ticker symbol, urging the company to release the requested data. If it defies, we inform the public that the company is not transparent enough about its statements, and shareholders will be responsible for making a final decision about their shares,” he said.
He said he believes if a ticker symbol is to be closed, it should happen automatically, based on a market mechanism. “For instance, if prices fluctuate rapidly in a short period, ticker symbols are closed automatically but they’ll be reopened shortly,” he explained.
Referring to EPS forecasts, he said that the norm in the world is that companies only present management reports, and not EPS forecasts.
He criticized Iranian companies for presenting EPS forecasts, saying, “That would be analysts’ duty to forecast based on raw material provided by listed firms.”
He said it will take a while for officials to persuade companies to avoid presenting forecast, but the final result will be satisfactory.