What are the reasons for the suspension? What are the differences with China's suspension rules?
Many investors who invest in stocks may encounter suspension. Whether you buy deep stocks, Hong Kong stocks, or US stocks, you will inevitably encounter suspension. Speaking of U.S. stocks, do you know what are the reasons for the suspension of trading in the United States and what are the differences between them and the suspension rules in China.
What are the reasons for the suspension?
1、 What are the reasons for the suspension of trading in the US stock market?
1. When a listed company has important information to announce, such as publishing annual report and interim performance report, holding shareholders' meeting, increasing capital and shares, publishing distribution plan, major merger and acquisition, investment and equity change, etc.
2. When the securities regulatory authority considers that a listed company should clarify and make an announcement on issues that have a significant impact on the company.
3. When a listed company is suspected of violating the rules and needs to be investigated, the length of suspension shall be determined according to the situation.
4. The U.S. financial market was closed on May 25 for the memorial day of the dead in the war, and it was trading normally on May 26. On May 25, the British financial market was closed for the spring bank holiday.
Compared with other European countries, there are relatively few public holidays in the UK. Usually, these public holidays are also known as "bank holidays" because banks are closed and all transactions are suspended during the holidays.
The British bank holiday began in 1871. As Sir John Lubbock, who was keen on cricket at that time, insisted that bank employees should also have the opportunity to participate in the competition. Therefore, the bank holiday Act enacted that year stipulated that there were four "bank holidays" in England, Wales and Ireland, while there were five "bank holidays" in Scotland due to the unique new year's activities. Traditionally, cricket matches are held on bank holidays.
Today, there are eight permanent "bank holidays" in England, Wales and Scotland, and 10 in Northern Ireland. These holidays include Christmas day and good Friday. Although the law does not specifically stipulate that they are "bank holidays", the public will treat them equally because of the established practice.
2、 The difference between the suspension rules of China's stock market and that of the United States:
1. Comparison of suspension times
According to statistics, the average number of A-share listed companies in the two cities is more than 6 times a year, while that of overseas securities markets is only 0.2779 times a year, far lower than the domestic level.
It should be said that a large number of mechanical provisions on routine trading suspension cause the listed companies to be suspended because of the events which are not closely related to the stock price changes. This leads to the formalism tendency of the suspension, destroys the continuity and naturalness of the transaction, damages the market efficiency and the interests of investors, and increases the technical risk of transaction management, especially the delay of some long-term suspension The stocks that have been resumed will lead to over-the-counter trading and even economic disputes, which will not only damage the real interests of small and medium-sized investors, but also bring unstable factors.
2. Comparison of suspension periods
In addition, at present, the domestic suspension system mainly focuses on the matters related to the information released during non trading hours, and lacks timely and effective measures to deal with some important changes in the trading, which reflects the tendency of post event supervision and non dynamic supervision outside trading hours, resulting in certain regulatory blind spots. The common principle of overseas exchanges is to make a decision on whether to suspend trading after substantive examination and judgment of matters that may have a significant impact on the operation of stock prices and abnormal fluctuations. Regulatory activities are accompanied by the operation of the capital market at any time and place, and there are few formalistic suspension provisions.
The above is a summary of the reasons for the suspension of trading in the United States, and what are the differences between the suspension rules in China and those in the United States. I hope it will help you. Whether you buy Shenzhen stocks, Hong Kong stocks or US stocks, Xiaobian hopes that you can abide by the relevant rules of the stock market and make a lot of money in the stock market!