Question

Write any three immediate effects on a trading member upon suspension.

Hint:

Compliance with regulations prevents suspension and ensures smooth trading operations.

Answer 1

When a trading member is suspended by the exchange, the following immediate effects are observed:

Cessation of Trading Rights: The trading member loses the right to access the trading platform and cannot carry out buy or sell transactions.
Client Order Restrictions: All outstanding client orders are automatically cancelled, and the member is restricted from accepting new orders from clients.
Frozen Accounts and Margin Calls: Their clearing accounts and margins may be frozen, and they are barred from settlement activities until compliance is restored.
These actions are taken to ensure market integrity and protect the interests of investors.