{"id":7722,"date":"2024-03-27T19:10:58","date_gmt":"2024-03-27T19:10:58","guid":{"rendered":"https:\/\/economicherald.net\/?p=7722"},"modified":"2024-03-27T19:10:58","modified_gmt":"2024-03-27T19:10:58","slug":"confused-heres-what-trading-halt-pause-and-suspension-from-quotation-mean-on-the-asx","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=7722","title":{"rendered":"Confused? Here\u2019s what trading halt, pause, and suspension from quotation mean on the ASX"},"content":{"rendered":"<p>What you should know about the different types of trading halts<br \/>\nWhy trading halts can protect investors<br \/>\nWhich companies are currently under suspension<\/p>\n<p>\u00a0<\/p>\n<p>For the most part, trading on the ASX takes place without interruption throughout the day.<\/p>\n<p>But sometimes, a stock may be subject to a short-term trading halt, trading pause, or even longer-term suspensions.<\/p>\n<p>Generally speaking, the aim of these halts is to protect investors, but sometimes they could also be a precursor to some negative announcements from the company in question.<\/p>\n<p>Investors should therefore proceed cautiously before purchasing a stock after a trading suspension has ended.<\/p>\n<p>On the the ASX,<a href=\"https:\/\/www.asx.com.au\/documents\/rules\/Chapter17.pdf\" target=\"_blank\" rel=\"noopener\"> there are three types<\/a> of trading halts\/suspensions, and here\u2019s what you should know about each of them:<\/p>\n<p>\u00a0<\/p>\n<h2>Trading Halt<\/h2>\n<p>On the ASX, a Trading Halt (sometimes also called Pause in Trading) is typically initiated by the company, which allows them time to disseminate important new information.<\/p>\n<p>The vast majority of trading halts is due to cap raising announcements, an event that could have a material impact on the stock price.<\/p>\n<p>During a halt, trading in the stock is effectively suspended, meaning no buying or selling can occur.<\/p>\n<p>This pause allows investors to digest the information and make informed decisions once trading resumes.<\/p>\n<p>Apart from cap raising, trading halts can also be used prior to announcements such as a merger, acquisition, or even a material contract signing.<\/p>\n<p>ASX Operating Rule 16.4.2 says that a trading halt can only be applied for a maximum of two trading days.<\/p>\n<p>But it can also be as short as one hour during the trading day.<\/p>\n<p>\u00a0<\/p>\n<h2>Pause in Trading<\/h2>\n<p>A Pause in Trading can also be initiated by the ASX (as opposed to the company) due to certain circumstances.<\/p>\n<p>This could be things like unexplained big price jumps or falls, excessive volatility, or even market-wide issues.<\/p>\n<p>During a Pause in Trading, the ASX would usually query the company if they knew of any relevant news which may have caused the share price move.<\/p>\n<p>The pause is often lifted by the ASX once the company makes a satisfactory response to the ASX query.<\/p>\n<p>A pause in trading can sometimes be applied across the whole market to help stabilise it during turbulent conditions.<\/p>\n<p>In November 2020, a glitch in the ASX system shut down trading, with the ASX announcing a trading pause for the entire market for almost a full trading day.<\/p>\n<p>\u00a0<\/p>\n<h2>Suspension from Quotation<\/h2>\n<p>Suspension from Quotation is probably the most serious of the three trading halts.<\/p>\n<p>It refers to the ASX\u2019s decision to halt trading in a particular stock for a more extended period.<\/p>\n<p>This could be imposed for things such as financial distress, fraud, regulatory concerns, or a disciplinary measure. Companies can also be suspended if they fail to comply with the ASX listing rules.<\/p>\n<p>The duration of Suspension from Quotation can be longer from a halt, and will remain in place until the underlying issues are resolved, or until the ASX is satisfied.<\/p>\n<p>Some shares are suspended for months, even years, before they are either delisted or reinstated to quotation.<\/p>\n<p>At the moment, a list of ASX companies under longer term suspension for various reasons include:<\/p>\n<p><a href=\"https:\/\/stockhead.com.au\/company\/holista-colltech-hct\/\">Holista Colltech (ASX:HCT)<\/a><br \/>\n<a href=\"https:\/\/stockhead.com.au\/company\/epsilon-healthcare-epn\/\">Epsilon Healthcare (ASX:EPN)<\/a><br \/>\n<a href=\"https:\/\/stockhead.com.au\/company\/audio-pixels-holdings-akp\/\">Audio Pixels (ASX:AKP)<\/a><br \/>\n<a href=\"https:\/\/stockhead.com.au\/company\/leo-lithium-lll\/\">Leo Lithium (ASX:LLL)<\/a><br \/>\n<a href=\"https:\/\/stockhead.com.au\/company\/atomos-ams\/\">Atomos (ASX:AMS)<\/a><\/p>\n<p>\u00a0<\/p>\n<h2>The market\u2019s circuit breaker<\/h2>\n<p>Trading halts, which basically serve as circuit breakers, are put in place to meet the needs of today\u2019s volatile markets where trades can be executed in milliseconds.<\/p>\n<p>The mechanisms are designed to protect investors, especially retail investors who would normally receive price sensitive news slower than institutional investors.<\/p>\n<p>Importantly, these circuit breakers could stop algorithmic trading computers from executing sell orders that may cause freefalls in the market.<\/p>\n<p>Although trades can not be executed during a trading halt, investors still can place, amend, or cancel orders.<\/p>\n<p>On resumption of a trading halt, the initial price will be set on where the higher buyers and the lowest sellers meet \u2013 establishing an orderly market.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/primers\/confused-heres-what-trading-halt-pause-and-suspension-from-quotation-mean-on-the-asx\/\">Confused? Here\u2019s what trading halt, pause, and suspension from quotation mean on the ASX<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>What you should know about the different types of trading halts Why trading halts can protect investors Which companies are currently under suspension \u00a0 For <a href=\"https:\/\/economicherald.net\/?p=7722\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":0,"featured_media":7723,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Confused? 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