SEBI has mandated that shares of companies will be traded in the normal segment of the market only if at least 50% of the stock held by the public is in the demat form. This is as per a circular issued by SEBI on Friday the 3rd of September.

Companies have been given until 31st October to comply with the same. In case they fail to comply with the same, such companies would be shifted to the trade-for trade segment.

In yet another move, SEBI has introduced new rules for shares of companies going for a merger, de-merger or a change in capital structure. The basic idea behind this is to reduce the volatility which is being witnessed in such shares. 

The guidelines stipulate that trading in such cases would be under the trade-to-trade category so that every trade results in delivery between the buyer and seller. There would also be price restrictions by way of circuit filters in place during these 10 days.

A recent case of extreme volatility was witnessed when shares of Emami Infrastructure were listed on the 28th of July. The scrip listed at Rs 250, made a high of Rs 293, a low of Rs 86 and closed at Rs 101.70. Since then in about five weeks of trading, the scrip has been falling and closed at Rs 58.10 on Friday the 3rd of September.

These steps are in the interest of the market and retail investors would certainly benefit by these steps.

The full text of the circular from SEBI can be accessed here.