Suspensions are a big deal (to me)

Trading suspensions are a semi-regular occurrence on the PSE, as they are the “stick” that the rules give to the PSE to brute-force corporations into compliance for a wide range of non-compliant behaviors. Most of the PSE’s suspensions are for companies that have failed to submit their Annual or Quarterly Report (sometimes both), but there have been an increasing number of suspensions handed out for public float violations, which is a more serious problem (as we’ll get into). This post is all about suspensions, what they are, what they do, and why they’re trouble for investors.

Major disclaimer: I suspect this post is of most interest to medium- and long-term investors (like me) who hold positions in the market for years at a time.

However, even if you’re a short-term trader with no interest in organizational competency, you might like to learn a little bit about suspensions and how they work!

> What is a suspension?  A trading suspension just means that the company’s shares cannot be traded on the PSE while the company is suspended. A suspension has no immediate or direct impact on the operation of the company itself, nor does it have any immediate or direct impact on the actual shares owned by the majority and minority shareholders. The company is still free to operate, and shareholders are still free to buy and sell their shares – just not using the PSE’s infrastructure. 

> How long does it last?  For as long as the company is in violation of the rules.

Suspensions are more like inducements to good behavior than they are actual punishments. If a company is suspended for non-filing of a Quarterly Report, they remain suspended until they file that report. But as soon as they do file, the suspension will be lifted. 

> What happens at the end of the suspension period?  The rules do not technically permit the PSE to allow a company to remain in permanent suspension (there may be some exceptions for companies going through rehabilitation and similar processes).