Illiquid stocks are those that can't be sold easily because they see limited trading. They pose higher risks to investors because it is difficult to find buyers for them as compared to frequently traded shares.
In separate circulars, NSE and BSE advised their trading members "to exercise additional due diligence while trading in these securities either on own account or on behalf of their clients."
BSE and NSE have listed out 366 and 39 illiquid stocks respectively where additional due diligence is required.
The exchanges said that periodic call auction will be conducted in these 405 securities with effect from October 12.
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In December 2014, capital markets regulator Sebi had relaxed norms for trading in illiquid stocks.
The move was aimed at shifting various illiquid scrips to normal trading session from the 'periodic call auction', the window where these stocks are currently traded.