In a stern warning on non- compliance of rules by listed firms, regulator Sebi has said the promoters must face the penal action first and the trading suspension or delisting would be the last resort so as to safeguard the interest of investors. The assertion comes in the backdrop of trading having been suspended in shares of more than 1,000 companies for several years for various penal reasons, including for the non-compliance to listing rules. It has been suggested that these companies should be mandatorily delisted from the stock market as they failed to take any measures to restore trading in their shares despite repeated reminders from stock exchanges and the regulator in the past. "Delisting can be done and that is very much possible. But how do we ensure that the shareholders get their money back. That becomes a problem," Sebi Chairman U K Sinha said. Under the Sebi regulations, shares of such companies are moved to a specific platform named 'Dissemination Board', where trading takes place in a restricted manner and a price is quoted when someone wants to buy or sell those shares. "The problem in these companies is that they have been there for such a long time and there are no active shareholders and no trading is happening. "In the hindsight, we were also doing certain things which was probably not right," Sinha told PTI. "We were suspending the companies left and right for any kind of violation. In 2013, we came out with a new set of guidelines that if you are violating the listing norms, then there would be a Standard Operating Procedure for the actions to be taken. Suspension is the last option," he added. Explaining further, the Sebi chief said that the first stage of any penal action must be to "hurt the promoter financially". "Therefore, we have provided under this SOP that you (promoter) can not get your dividend. We put a ban on the promoter's economic interest. He can not get dividend and he can not sell shares. "Then we impose penalty on promoters, then on the management and after a series of other actions, ultimately comes the suspension," Sinha said. The Sebi Chairman further said that the regulator has also closed 17-18 regional stock exchanges because no activity was taking place and they had become a risky place and "may be a place where dabba trading was taking place". "So we have closed them. But, we have been very fair in giving them the benefits that are due to them. Whatever assets they have, after paying statutory dues, they can sell them. We allowed that and our orders have been upheld by the high courts also," Sinha said.