109004579 Finance Project
-
Upload
pankaj-aggarwal -
Category
Documents
-
view
214 -
download
0
Transcript of 109004579 Finance Project
-
7/28/2019 109004579 Finance Project
1/63
PROJECT REPORT ON
Listing of securities
IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR
THE COURSE MASTER OF MANAGEMENT STUDIES
UNIVERSITY OF MUMBAI
SPECIALISATION:
Finance
1
-
7/28/2019 109004579 Finance Project
2/63
INDEX
SR NO. TITLE PAGENO.
1 LISTING 4
2 BSE INDIA 5
3 NSE INDIA 15
4 ASX AUSTRALIA 33
5 BURSA MALAYSIA MALASIA 40
6 SINGAPORE SGX 44
7 USA NASDAQ 52
8 UK FTSE 61
2
-
7/28/2019 109004579 Finance Project
3/63
LISTING:
It is the process of taking a privately-owned organisation and making the transition to a
publicly-owned entity whose shares can be traded on a stock exchange.
Listing means admission of the securities to dealings on a recognised stock exchange.
The securities may be of any public limited company, Central or State Government,
quasi governmental and other financial institutions/corporations, municipalities, etc.
The ability to have its shares traded on a stock exchange is central to an organisation's
decision to list. The fundamental role of a stock exchange is to bring together in one
market place providers of capital and organisations that require capital.. Providers of
capital earn a return on their investments through dividends and capital growth, thereby
increasing the overall wealth of the nation, while the organisations in which they invest
provide jobs and drive the economic development of Country.
The objectives of listing are mainly to :
provide liquidity to securities;
mobilize savings for economic development;
protect interest of investors by ensuring full disclosures.
These benefits include:
Access to capital for growth listing gives one the opportunity to raise capital
to fund acquisitions and/or organic growth.
Higher public and investor profile listing generally raises organisations
public profile with customers, suppliers, investors and the media. Organisation
may also be covered in analyst reports and may be included in an index.
Institutional investment public listing means organisation will find it easier
to attract institutional and professional investors.
Improved valuation being listed generates an independent valuation of
organisation by the market.
A (secondary) market for organisations shares trading of shares on gives
shareholders the opportunity to realise the value of their holdings, which in turn
can help broaden the shareholder base.
3
-
7/28/2019 109004579 Finance Project
4/63
Exit strategy for early stage investors listing provides a mechanism for
founders of a company, family interests or early stage investors to exit their
investment.
Alignment of employee/management interests the process of remunerating
the employees, executives and directors with shares is simplified, making it
easier to align the interests of employees with the goals of the organisation.
Reassurance of customers and suppliers organisations listed on generally
find that the perception of their financial and business strength is improved.
READTNESS OF ORGANISATION TO GET LISTED :
What are the organisation's long-term goals and strategies?
Are there skill gaps at the senior management and board level?
How will these be resolved in a listed environment?
Are directors and senior managers prepared for greater disclosure,
accountability and transparency after listing?
Is organisations culture ready for listing?
Are there tax issues to be resolved? Are strategies in place to retain key employees and key customers?
What initiatives (e.g. acquisitions) need to be completed before listing?
Are your operational, financial and management information systems
sufficiently robust for a listed organisation?
Have you taken account of corporate governance best practice?
Is the timing right for a listing, in terms both of the business and of market
conditions? Do you understand what investors and the market expect and require from you?
Answers to these questions will give a good indication of how prepared company is for
the transition to a publicly-listed company.
4
-
7/28/2019 109004579 Finance Project
5/63
BSE - INDIA
The Exchange has a separate Listing Department to grant approval for listing of
securities of companies in accordance with the provisions of the Securities Contracts
(Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act,
1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of the
Exchange.
A company intending to have its securities listed on the Exchange has to comply with
the listing requirements prescribed by the Exchange. Some of the requirements are as
under :
A. Minimum Listing Requirements for new companies.
B. Minimum Listing Requirements for companies listed on other stock exchanges.
C. Minimum Requirements for companies delisted by this Exchange seeking
relisting of this Exchange.
D. Permission to use the name of the Exchange in an Issuer Company's prospectus.
E. Submission of Letter of Application.
F. Allotment of Securities.
G. Trading Permission.
H. Requirement of 1% Security.
I. Payment of Listing Fees.
J. Compliance with Listing Agreement.
K. Compliance with regard to Valuation Certificate for fixing the base price.
L. Cash Management Services (CMS) - Collection of Listing Fees.
A. Minimum Listing Requirements for new companies
The following revised eligibility criteria for listing of companies on the Exchange,
through Initial Public Offerings (IPOs) & Follow-on Public Offerings (FPOs), effective
August 1, 2006.
ELIGIBILITY CRITERIA FOR IPOs/FPOs
5
-
7/28/2019 109004579 Finance Project
6/63
1. Companies have been classified as large cap companies and small cap
companies. A large cap company is a company with a minimum issue size of
Rs. 10 crores and market capitalization of not less than Rs. 25 crores. A small
cap company is a company other than a large cap company.
a. In respect of Large Cap Companies
i. The minimum post-issue paid-up capital of the applicant
company (hereinafter referred to as "the Company") shall be Rs.
3 crores; and
ii. The minimum issue size shall be Rs. 10 crores; and
iii. The minimum market capitalization of the Company shall be Rs.
25 crores (market capitalization shall be calculated by
multiplying the post-issue paid-up number of equity shares with
the issue price).
b. In respect of Small Cap Companies
i. The minimum post-issue paid-up capital of the Company shall be
Rs. 3 crores; and
ii. The minimum issue size shall be Rs. 3 crores; and
iii. The minimum market capitalization of the Company shall be Rs.
5 crores (market capitalization shall be calculated by multiplying
the post-issue paid-up number of equity shares with the issue
price); and
iv. The minimum income/turnover of the Company should be Rs. 3
crores in each of the preceding three 12-months period; and
v. The minimum number of public shareholders after the issue shall
be 1000.
vi. A due diligence study may be conducted by an independent team
of Chartered Accountants or Merchant Bankers appointed by the
Exchange, the cost of which will be borne by the company. The
requirement of a due diligence study may be waived if a
financial institution or a scheduled commercial bank has
appraised the project in the preceding 12 months.
6
-
7/28/2019 109004579 Finance Project
7/63
2. For all companies :
a. In respect of the requirement of paid-up capital and market
capitalisation, the issuers shall be required to include in the disclaimer
clause forming a part of the offer document that in the event of the
market capitalisation (product of issue price and the post issue number
of shares) requirement of the Exchange not being met, the securities of
the issuer would not be listed on the Exchange.
b. The applicant, promoters and/or group companies, should not be in
default in compliance of the listing agreement.
c. The above eligibility criteria would be in addition to the conditions
prescribed under SEBI (Disclosure and Investor Protection) Guidelines,
2000.
B. Minimum Listing Requirements for companies listed on other stock exchanges
The Governing Board of the Exchange at its meeting held on 6th August, 2002
amended the direct listing norms for companies listed on other Stock Exchange(s) and
seeking listing at BSE. These norms are applicable with immediate effect.
1. The company should have minimum issued and paid up equity capital of Rs. 3
crores.
2. The Company should have profit making track record for last three years. The
revenues/profits arising out of extra ordinary items or income from any source
of non-recurring nature should be excluded while calculating distributable
profits.
3. Minimum networth of Rs. 20 crores (networth includes Equity capital and free
reserves excluding revaluation reserves).
4. Minimum market capitalisation of the listed capital should be at least two times
of the paid up capital.
5. The company should have a dividend paying track record for the last 3
consecutive years and the minimum dividend should be at least 10%.
7
-
7/28/2019 109004579 Finance Project
8/63
6. Minimum 25% of the company's issued capital should be with Non-Promoters
shareholders as per Clause 35 of the Listing Agreement. Out of above Non
Promoter holding no single shareholder should hold more than 0.5% of the paid-
up capital of the company individually or jointly with others except in case of
Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate
Bodies and Non-Resident Indians.
7. The company should have at least two years listing record with any of the
Regional Stock Exchange.
8. The company should sign an agreement with CDSL & NSDL for demat trading.
C. Minimum Requirements for companies delisted by this Exchange seeking
relisting of this Exchange
The companies delisted by this Exchange and seeking relisting are required to make a
fresh public offer and comply with the prevailing SEBI's and BSE's guidelines
regarding initial public offerings.
D. Permission to use the name of the Exchange in an Issuer Company's prospectus
The Exchange follows a procedure in terms of which companies desiring to list their
securities offered through public issues are required to obtain its prior permission to use
the name of the Exchange in their prospectus or offer for sale documents before filing
the same with the concerned office of the Registrar of Companies. The Exchange has
since last three years formed a "Listing Committee" to analyse draft prospectus/offer
documents of the companies in respect of their forthcoming public issues of securities
and decide upon the matter of granting them permission to use the name of "Bombay
Stock Exchange Limited" in their prospectus/offer documents. The committee evaluates
the promoters, company, project and several other factors before taking decision in this
regard.
E. Submission of Letter of Application
As per Section 73 of the Companies Act, 1956, a company seeking listing of its
securities on the Exchange is required to submit a Letter of Application to all the Stock
Exchanges where it proposes to have its securities listed before filing the prospectus
with the Registrar of Companies.
8
-
7/28/2019 109004579 Finance Project
9/63
F. Allotment of Securities
As per Listing Agreement, a company is required to complete allotment of securities
offered to the public within 30 days of the date of closure of the subscription list and
approach the Regional Stock Exchange, i.e. Stock Exchange nearest to its RegisteredOffice for approval of the basis of allotment.
In case of Book Building issue, Allotment shall be made not later than 15 days from the
closure of the issue failing which interest at the rate of 15% shall be paid to the
investors.
G. Trading Permission
As per Securities and Exchange Board of India Guidelines, the issuer company should
complete the formalities for trading at all the Stock Exchanges where the securities are
to be listed within 7 working days of finalisation of Basis of Allotment.
A company should scrupulously adhere to the time limit for allotment of all securities
and dispatch of Allotment Letters/Share Certificates and Refund Orders and for
obtaining the listing permissions of all the Exchanges whose names are stated in its
prospectus or offer documents. In the event of listing permission to a company being
denied by any Stock Exchange where it had applied for listing of its securities, it cannot
proceed with the allotment of shares. However, the company may file an appeal before
the Securities and Exchange Board of India under Section 22 of the Securities Contracts
(Regulation) Act, 1956.
H. Requirement of 1% Security
The companies making public/rights issues are required to deposit 1% of issue amount
with the Regional Stock Exchange before the issue opens. This amount is liable to be
forfeited in the event of the company not resolving the complaints of investors
regarding delay in sending refund orders/share certificates, non-payment of commission
to underwriters, brokers, etc.
9
-
7/28/2019 109004579 Finance Project
10/63
I. Payment of Listing Fees
All companies listed on the Exchange have to pay Annual Listing Fees by the 30th
April of every financial year to the Exchange as per the Schedule of Listing Fees
prescribed from time to time.
The schedule of listing fees for the year 2007-2008, prescribed by the Governing Board
of the Exchange is given hereunder
SCHEDULE OF LISTING FEES FOR THE YEAR 2007-2008
Sr.
No.
Particulars Amount
(Rs.)
1 Initial Listing Fees 20,0002 Annual Listing Fees
(i) Companies with listed capital* upto Rs. 5 crores
(ii) AboveRs. 5 crores and upto Rs. 10 crores
(iii) Above Rs. 10 crores and upto Rs. 20 crores
10,000
15,000
30,000
3 Companies which have a listed capital* of more than Rs. 20 crores
will pay additional fee of Rs. 750/- for every increase of Rs. 1
crores or part thereof.
4 In case of debenture capital (not convertible into equity shares) of
companies, the fees will be charged @ 25% of the fees payable as
per the above mentioned scales.
*includes equity shares, preference shares, fully convertible debentures, partly
convertible debenture capital and any other security which will be converted into equityshares.
J. Compliance with Listing Agreement
The companies desirous of getting their securities listed are required to enter into an
agreement with the Exchange called the Listing Agreement and they are required to
make certain disclosures and perform certain acts. As such, the agreement is of great
importance and is executed under the common seal of a company. Under the Listing
10
-
7/28/2019 109004579 Finance Project
11/63
Agreement, a company undertakes, amongst other things, to provide facilities for
prompt transfer, registration, sub-division and consolidation of securities; to give proper
notice of closure of transfer books and record dates, to forward copies of unabridged
Annual Reports and Balance Sheets to the shareholders, to file Distribution Schedule
with the Exchange annually; to furnish financial results on a quarterly basis; intimate
promptly to the Exchange the happenings which are likely to materially affect the
financial performance of the Company and its stock prices, to comply with the
conditions of Corporate Governance, etc.
The Department of Corporate Services (Listing Department) of the Exchange monitors
the compliance by the companies with the provisions of the Listing Agreement,
especially with regard to timely payment of annual listing fees, submission of quarterlyresults, shareholding pattern, maintenance of minimum public shareholding, corporate
announcements, corporate actions, etc. and takes penal action against the defaulting
companies.
To facilitate the Companies to submit Corporate Filings, the Exchange has earmarked
Ten Designated Fax Numbers for Corporate Filings. The Companies are advised to
submit all Corporate Filings on these Designated Fax Numbers only. Filings on
numbers other than the Designated Fax Numbers will not be construed as effective
compliance and the Exchange will not be responsible for any consequent delayed
uploading of the same on its website. Moreover, the Exchange may initiate such suitable
action as may deem fit in this regard.
K. Compliance with regard to Valuation Certificate for fixing the base price
For the purpose of commencing / re-commencing / determining the ex-price for trading
in securities in cases like de-merger, amalgamation, capital reduction, scheme of
arrangements, revocation of suspension (for suspension of more than 6 months), etc.,
the Companies are required to submit a Valuation certificate from the SEBI registered
Merchant Banker indicating the price/ fair value of the shares.
The indicative price/ fair value mentioned in the certificate of SEBI registered Merchant
Banker provided by the company will be considered as base price for applying actual
price band / circuit filters upon the commencement/ re-commencement of trading and
11
-
7/28/2019 109004579 Finance Project
12/63
for determining the ex-price for trading in securities.
The Company shall indicate to the Merchant Banker very clearly, that the fair value so
calculated by them is for the purpose of setting the base price upon commencement/ re-
commencement of trading and for determining the ex-price for trading in securities.
L. Cash Management Services (CMS) - Collection of Listing Fees
As a further step towards simplifying the system of payment of listing fees, the
Exchange has entered into an arrangement with HDFC Bank for collection of listing
fees, from 141 locations, situated all over India.Details of the HDFC Bank branches, are
available on our website site www.bseindia.com as well as on the HDFC Bank website
www.hdfcbank.com The above facility is being provided free of cost to the Companies.
Companies intending to utilise the above facility for payment of listing fee would be
required to furnish the information, (mentioned below) in the Cash Management Cash
Deposit Slip. These slips would be available at all the HDFC Bank centres.
S.No HEAD INFORMATION TO BE PROVIDED
1. Client
Name
Bombay Stock Exchange Limited
2. Client Code BSELIST
3. Cheque No. mention the cheque No & date
4. Date date on which payment is being deposited with the bank.
5. Drawer state the name of the company and the company code No.The last
digits mentioned in the Ref. No. on the Bill is the company code
No.e.g If the Ref. No in the Bill is mentioned as : Listing/Alf-
Bill/2004-2005/4488, then the code No of that company is 4488
6. DraweeBank
state the bank on which cheque is drawn
7. Drawn on
Location
Mention the location of the drawee bank.
8. Pickup
Location
Not applicable
9. No. of Insts Not applicable
12
-
7/28/2019 109004579 Finance Project
13/63
NSE - INDIA
Benefits of Listing on NSE
A premier market place
Visibility
Largest exchange
Unprecedented reach
Modern infrastructure
Transaction speed
Short settlement cycles
Broadcast of corporate announcements
Trade statistics for listed companies
Investor service centers
Nominal listing fees
13
-
7/28/2019 109004579 Finance Project
14/63
A premier marketplace
The sheer volume of trading activity ensure that the impact cost is lower on the
Exchange which in turn reduces the cost of trading to the investor. NSEs automated
trading system ensure consistency and transparency in the trade matching which
enhances investors confidence and visibility of our market.
Visibility
The trading system provides unparallel level of trade and post-trade information. The
best 5 buy and sell orders are displayed on the trading system and the total number of
securities available for buying and selling is also displayed. This helps the investor to
know the depth of the market. Further, corporate announcements, results, corporate
actions etc are also available on the trading system.
Largest exchange
NSE is the largest exchange in the county in terms of trading volumes. During the year
2006-2007, NSE reported a turnover of Rs. 1,945,285 crores in the equities segment.
Unprecedented reach
NSE provides a trading platform that extends across the length and breadth of the
country. Investors from 360 centres can avail of trading facilities on the NSE Trading
Network. The Exchange uses the latest in communication technology to give instant
access from every location.
Modern infrastructure
NSE introduced for the first time in India, fully automated screen based trading. The
Exchange uses a sophisticated telecommunication network with over 9000 trading
terminals connected through VSATs (Very Small Aperture Terminals).
Transaction speed
The speed at which the Exchange processes orders, results in liquidity and best
available prices. The Exchange's trading system on an average processes 8000 orders
per minute. The highest number of trades in a day of 63,89,264 was recorded on october
14
-
7/28/2019 109004579 Finance Project
15/63
03, 2007.
Short settlement cycles
The Exchange has successfully completed more than 1900 settlements without any
delays.
Broadcast facility for corporate announcements
The NSE network is used to disseminate information and company announcements
across the country. Important information regarding the company is announced to the
market through the Broadcast Mode on the NEAT System as well as disseminated
through the NSE website. Corporate developments such as financial results, book
closure, announcements of bonus, rights, takeover, mergers etc. are disseminated across
the country thus minimizing scope for price manipulation or misuse.
Trade statistics for listed companies
Listed companies are provided with monthly trade statistics for all the securities of the
company listed on the Exchange.
Investor service centersSix investor-service centers opened by NSE across the country cater to the needs of
investors.
Nominal listing fees
The listing fee charged by the Exchange is much lower compared to the listing fees
charged by other exchanges.
Eligibility Criteria for Listing on NSE
An applicant who desires listing of its securities with NSE must fulfill the following
pre-requisites:
For Initial Public Offerings (IPOs)
For Securities of Existing Companies
15
-
7/28/2019 109004579 Finance Project
16/63
NSE staff welcome the opportunity to discuss a companys eligibility to list before a
formal application is made. On fulfillment of the eligibility criteria, the company is
required to fill in the listing application form.
IPOs by Companies
Qualifications for listing Initial Public Offerings (IPO) are as below:
1. Paid up Capital
The paid up equity capital of the applicant shall not be less than Rs. 10 crores
and the capitalisation of the applicants equity shall not be less than Rs. 25
crores
2. Conditions Precedent to Listing:
The Issuer shall have adhered to conditions precedent to listing as emerging
from inter-alia from Securities Contracts (Regulations) Act 1956, Companies
Act 1956, Securities and Exchange Board of India Act 1992, any rules and/or
regulations framed under foregoing statutes, as also any circular, clarifications,
guidelines issued by the appropriate authority under foregoing statutes.
3. Atleast three years track record of either:
a. the applicant seeking listing; or
b. the promoters/promoting company, incorporated in or outside India or
c. Partnership firm and subsequently converted into a Company (not in
existence as a Company for three years) and approaches the Exchange forlisting. The Company subsequently formed would be considered for listing only
on fulfillment of conditions stipulated by SEBI in this regard.
For this purpose, the applicant or the promoting company shall submit annual
reports of three preceding financial years to NSE and also provide a certificate
to the Exchange in respect of the following:
The company has not been referred to the Board for Industrial and Financial
Reconstruction (BIFR).
16
-
7/28/2019 109004579 Finance Project
17/63
The networth of the company has not been wiped out by the accumulated
losses resulting in a negative networth
The company has not received any winding up petition admitted by a court.
The applicant desirous of listing its securities should satisfy the exchange on the
following:
a) No disciplinary action by other stock exchanges and regulatory
authorities in past three years
The applicant, promoters/promoting company(ies), group companies, companies
promoted by the promoters/promoting company(ies) have not been in default in
payment of listing fees to any stock exchange in the last three years or has not
been delisted or suspended in the past, and has not been proceeded against by
SEBI or other regulatory authorities in connection with investor related issues or
otherwise.
b) Redressal Mechanism of Investor grievance
The points of consideration are:
o The applicant, promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies) track
record in redressal of investor grievances
o The applicants arrangements envisaged are in place for servicing its
investor.
o The applicant, promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies) general
approach and philosophy to the issue of investor service and protection
o Defaults in respect of payment of interest and/or principal to the
debenture/bond/fixed deposit holders by the applicant,
promoters/promoting company(ies), group companies, companies
promoted by the promoters/promoting company(ies) shall also be
considered while evaluating a companys application for listing. The
17
-
7/28/2019 109004579 Finance Project
18/63
auditors certificate shall also be obtained in this regard. In case of
defaults in such payments the securities of the applicant company may
not be listed till such time it has cleared all pending obligations relating
to the payment of interest and/or principal.
c) Distribution of shareholding
The applicants/promoting company(ies) shareholding pattern on March 31 of
last three calendar years separately showing promoters and other groups
shareholding pattern should be as per the regulatory requirements.
d) Details of Litigation
The applicant, promoters/promoting company(ies), group companies, companies
promoted by the promoters/promoting company(ies) litigation record, the nature
of litigation, status of litigation during the preceding three years period need to
be clarified to the exchange.
e) Track Record of Director(s) of the Company
In respect of the track record of the directors, relevant disclosures may be
insisted upon in the offer document regarding the status of criminal cases filed
or nature of the investigation being undertaken with regard to alleged
commission of any offence by any of its directors and its effect on the business
of the company, where all or any of the directors of issuer have or has been
charge-sheeted with serious crimes like murder, rape, forgery, economic
offences etc.
Note:
In case a company approaches the Exchange for listing within six months of an IPO, the
securities may be considered as eligible for listing if they were otherwise eligible for
listing at the time of the IPO. If the company approaches the Exchange for listing after
six months of an IPO, the norms for existing listed companies may be applied and
market capitalisation be computed based on the period from the IPO to the time oflisting
18
-
7/28/2019 109004579 Finance Project
19/63
Eligibility Criteria for Listing
Securities of Existing Companies Checklist for Eligibility
Existing Companies listed on other stock exchanges
1. Paid up Capital & Market Capitalisation
a. The paid-up equity capital of the applicant shall not be less than Rs. 10
crores and the market capitalisation of the applicants equity shall not be
less than Rs. 25 crores
Provided that the requirement of Rs. 25 crores market capitalisation
under this clause 1(a) shall not be applicable to listing of securities
issued by Government Companies, Public Sector Undertakings,
Financial Institutions, Nationalised Banks, Statutory Corporations and
Banking Companies who are otherwise bound to adhere to all the
relevant statutes, guidelines, circulars, clarifications etc. that may be
issued by various regulatory authorities from time to time.
or
b. The paid-up equity capital of the applicant shall not be less than Rs. 25
crores (In case the market capitalisation is less than Rs. 25 crores, the
securities of the company should be traded for at least 25% of the
trading days during the last twelve months preceding the date of
submission of application by the company on at least one of the stock
exchanges where it is traded.)
or
c. The market capitalisation of the applicants equity shall not be less than
Rs. 50 crores.
or
d. The applicant Company shall have a net worth of not less than Rs.50
crores in each of the three preceeding financial years. The Company
shall submit a certificate from the statutory auditors in respect of
networth as stipulated above.
19
http://var/www/apps/conversion/current/tmp/scratch_2/checklist-eligibility.xlshttp://var/www/apps/conversion/current/tmp/scratch_2/checklist-eligibility.xls -
7/28/2019 109004579 Finance Project
20/63
2. Conditions Precedent to Listing:
The applicant shall have adhered to conditions precedent to listing as emerging
from inter-alia, Securities Contracts (Regulations) Act 1956, Companies Act
1956, Securities and Exchange Board of India Act 1992, any rules and/or
regulations framed under foregoing statutes, as also any circular, clarifications,
guidelines issued by the appropriate authority under foregoing statutes.
3. Atleast three years track record of either:
a. the applicant seeking listing; or or
b. the promoters/promoting company, incorporated in or outside India or
For this purpose, the applicant or the promoting company shall submit annual
reports of three preceding financial years to NSE and also provide a certificate
to the Exchange in respect of the following:
o The company has not been referred to the Board for Industrial and
Financial Reconstruction (BIFR)
o The networth of the company has not been wiped out by the
accumulated losses resulting in a negative networth.
o The company has not received any winding up petition admitted by a
court.
2. The applicant should have been listed on any other recognised stock exchange
for atleast last three years
3. The applicant has paid dividend in atleast 2 out of the last 3 financial years
immediately preceding the year in which listing application has been made
or
The applicant has distributable profits ( as defined under section 205 of the
Companies Act, 1956) in at least two out of the last three financial years (an
auditors certificate must be provided in this regard).
20
-
7/28/2019 109004579 Finance Project
21/63
or
The networth of the applicant is atleast Rs. 50 crores
While considering the profitability / ability to distribute dividend, the non
recurring income/extraordinary income shall be excluded from the total income.
Further in case of companies where networth criteria is satisfied on account of
shares being issued at a premium for consideration other than cash, such cases
be referred to the Listing Advisory Committee (LAC) for consideration.
applicable for listing of:
a) Equity shares and securities convertible into equity issued by
i. a banking company including a local area bank (i.e. Private Sector Banks) set
up under sub-clause (c) of Section 5 of the Banking Regulation Act, 1949 and
which has received license from the Reserve Bank of India or
ii. a corresponding new bank set up under the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970, Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1980, State Bank of India Act, 1955 and theState Bank of India (Subsidiary Banks) Act, 1959 (i.e. Public Sector Banks) or
iii. an infrastructure company (a) whose project has been appraised by a Public
Financial Institution or Infrastructure Development Finance Corporation (IDFC)
or Infrastructure Leasing and Financial Services Limited (IL&FS) and (b) not
less than 5% of the project cost is financed by any of the institutions referred to
in clause (a) above, jointly or severally, irrespective of whether they appraise the
project or not, by way of loan or subscription to equity or a combination of both.
b) Securities other than equity shares or securities convertible into equity shares
at a later date issued by Government Companies, Public Sector Undertakings,
Financial Institutions, Nationalised Banks, Statutory Corporations, Banking
Companies and subsidiaries of Scheduled Commercial Banks.
21
-
7/28/2019 109004579 Finance Project
22/63
4. The applicant desirous of listing its securities should also satisfy the Exchange
on the following:
a. No Disciplinary action has been taken by other stock exchanges and
regulatory authorities in the past three years
The applicant, promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies) have not
been in default in payment of listing fees to any stock exchange in the
last three years or has not been delisted or suspended in the past and has
not been proceeded against by SEBI or other regulatory authorities in
connection with investor related issues or otherwise.
b. Redressal mechanism of Investor grievance
The points of consideration are:
The applicant, promoters/promoting company(ies), group
companies, companies promoted by the promoters/promoting
company(ies) track record in redressal of investor grievances
The applicants arrangements envisaged are in place for
servicing its investor
The applicant, promoters/promoting company(ies), group
companies, companies promoted by the promoters/promoting
company(ies) general approach and philosophy to the issue of
investor service and protection
defaults in respect of payment of interest and/or principal to the
debenture/bond/fixed deposit holders by the applicant,
promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies)
shall also be considered while evaluating a companys
application for listing. The auditors certificate shall also be
obtained in this regard. In case of defaults in such payments, the
22
-
7/28/2019 109004579 Finance Project
23/63
securities of the applicant company may not be listed till such
time it has cleared all pending obligations relating to the payment
of interest and/or principal.
c. Distribution of shareholding
The applicant company/promoting company(ies) shareholding pattern on
March 31 of preceding three years separately showing promoters and
other groups shareholding pattern should be as per the regulatory
requirements.
d. Details of Litigation
The applicant, promoters/promoting company(ies), group companies,
companies promoted by the promoters/promoting company(ies)
litigation record, the nature of litigation, status of litigation during the
preceding three years need to be clarified to the exchange.
e. Track Record of Director(s) of the Company
In respect of the track record of the directors, relevant disclosures may
be insisted upon in the offer document regarding the status of criminal
cases filed or nature of the investigation being undertaken with regard to
alleged commission of any offence by any of its directors and its effect
on the business of the company, where all or any of the directors of
issuer have or has been charge-sheeted with serious crimes like murder,
rape, forgery, economic offences etc.
f. Change in Control of a Company/Utilisation of funds raised from
public
In the event of new promoters taking over listed companies which
results in change in management and/or companies utilising the funds
raised through public issue for the purposes other than those mentioned
23
-
7/28/2019 109004579 Finance Project
24/63
in the offer document, such companies shall make additional disclosures
(as required by the Exchange) with regard to change in control of a
company and utilisation of funds raised from public.
Note:
a) Where an unlisted company merges with a company listed on other
stock exchanges and the merged entity seeks listing on the NSE, the
Exchange may grant listing to the merged entity only if the listed
company (prior to the merger with the unlisted company) meets all the
criteria for listing on its own account or the unlisted company meets the
requirements for listing on the Exchange, except for the market
capitalisation condition, on its own account. In case either of the above
conditions are not met then such company may be considered for listing
after a minimum period of 18 months or after the publication of two
annual reports whichever is later, provided it satisfies the criteria at that
point of time.
Listing Procedure
An Issuer has to take various steps prior to making an application for listing its
securities on the NSE. These steps are essential to ensure the compliance of certain
requirements by the Issuer before listing its securities on the NSE. The various steps to
be taken include:
Approval of Memorandum and Articles of Association Approval of draft prospectus
Submission of Application
Listing conditions and requirements
In case the company fulfils the criteria, please send the following information for
further processing :
1. A brief note on the promoters and management.
24
-
7/28/2019 109004579 Finance Project
25/63
2. Company profile.
3. Copies of the Annual Report for last 3 years.
4. Copies of the Draft Offer Document.
5. Memorandum & Articles of Association.
Listing Procedure
Approval of Memorandum and Articles of Association
Rule 19(2) (a) of the Securities Contracts (Regulation) Rules, 1957 requires that the
Articles of Association of the Issuer wanting to list its securities must contain
provisions as given hereunder.
The Articles of Association of an Issuer shall contain the following provisions namely:
a. That there shall be no forfeiture of unclaimed dividends before the claim
becomes barred by law;
b. That a common form of transfer shall be used;
c. that fully paid shares shall be free from all lien and that in the case of partly paid
shares the Issuer's lien shall be restricted to moneys called or payable at a fixed
time in respect of such shares;
d. That registration of transfer shall not be refused on the ground of the transferor
being either alone or jointly with any other person or persons indebted to the
Issuer on any account whatsoever;
e. That any amount paid up in advance of calls on any share may carry interest but
shall not in respect thereof confer a right to dividend or to participate in profits;
f. That option or right to call of shares shall not be given to any person except with
the sanction of the Issuer in general meetings.
g. Permission for Sub-Division/Consolidation of Share Certificate.
Note: The Relevant Authority may take exception to any provision contained in the
Articles of Association of an Issuer which may be deemed undesirable or unreasonable
in the case of a public company and may require inclusion of specific provisions
deemed to be desirable and necessary.
If the Issuer's Articles of Association is not in conformity with the provisions as stated
25
-
7/28/2019 109004579 Finance Project
26/63
above, the Issuer has to make amendments to the Articles of Association. However, the
securities of an Issuer may be admitted for listing on the NSE on an undertaking by the
Issuer that the amendments necessary in the Articles of Association to bring Articles of
Association in conformity with Rule 19(2)(a) of the Securities Contract (Regulation)
Rules, 1957 shall be made in the next annual general meeting and in the meantime the
Issuer shall act strictly in accordance with prevalent provisions of Securities Contract
(Regulation) Act, 1957 and other statutes.
It is to be noted that any provision in the Articles of Association which is not in tune
with sound corporate practice has to be removed by amending the Articles of
Association.
Listing Procedure
Approval of draft prospectus
The Issuer shall file the draft prospectus and application forms with NSE. The draft
prospectus should have been prepared in accordance with the statutes, notifications,
circulars, guidelines, etc. governing preparation and issue of prospectus prevailing at the
relevant time. The Issuers may particularly bear in mind the provisions of Companies
Act, Securities Contracts (Regulation) Act, the SEBI Act and the relevant subordinate
legislations thereto. NSE will peruse the draft prospectus only from the point of view of
checking whether the draft prospectus is in accordance with the listing requirements,
and therefore any approval given by NSE in respect of the draft prospectus should not
be construed as approval under any laws, rules, notifications, circulars, guidelines etc.
The Issuer should also submit the SEBI acknowledgment card or letter indicating
observations on draft prospectus or letter of offer by SEBI.
Listing Procedure :
Submission of Application :
For Issuers listing on NSE for the first time
Listing of further Issues by Issuers already listed on NSE
Listing Fees
26
-
7/28/2019 109004579 Finance Project
27/63
Security deposit (for new & fresh issues and when NSE is the Regional Stock
Exchange)
Supporting documents
Submission of Application (For Issuers listing on NSE for the first time)
Issuers desiring to list existing/new securities on the NSE shall make application for
admission of their securities to dealings on the NSE in the forms prescribed in this
regard as per details given hereunder or in such other form or forms as the Relevant
Authority may from time to time prescribe in addition thereto or in modification or
substitution thereof.
Appendix 'A' - Clauses of Articles of Association.
Appendix 'B'- Application Letter for Listing.
Appendix 'C-1' - Listing Application providing pre-issue details of securities.
Appendix 'C-2' - Listing Application providing post-issue details of securities.
Appendix 'D'- Checklist for supporting documents ( as applicable to the issuer)
Appendix 'E' - Schedule of Distribution
Appendix 'F'- Listing Agreement
Submission of Application (Listing of further Issues by Issuers already listed on
NSE)
Issuers whose securities are already listed on the NSE shall apply for admission to
listing on the NSE of any further issue of securities made by them. The application for
admission shall be made in the forms prescribed in this regard or in such other form or
forms as the Relevant Authority may from time to time prescribe in addition thereto or
in modification or substitution thereof.
Appendix 'E' - Schedule of Distribution
Appendix 'G'- Application Letter for Listing of further issues.
Appendix 'H' - Listing Application providing details of securities.
Appendix 'I' - Checklist for supporting documents submitted (as applicable)
Listing Fees
27
-
7/28/2019 109004579 Finance Project
28/63
The listing fees depend on the paid up share capital of the Company:
Particulars Amount (Rs.)
Initial Listing Fees 7,500
Annual Listing FeesCompanies with paid up share and/or debenture capital:
Of Rs.1 crore 4,200
Above Rs.1 crore and up to Rs.5 crores 8,400
Above Rs.5 crores and up to Rs.10 crores 14,000
Above Rs.10 crores and up to Rs.20 crores 28,000
Above Rs.20 crores and up to Rs.50 crores 42,000
Above Rs.50 crores 70,000
Companies which have a paid up capital of more than Rs. 50 crores will pay additional
listing fees of Rs. 1400 for every increase of Rs. 5 crores or part thereof in the paid up
share/debenture capital.
Submission of Application (Security Deposit)
(Payable only for new and fresh issues and only when NSE is the Regional Stock
Exchange)
The Relevant Authority shall not grant admission to dealings of securities of an Issuer
which is not listed or of any new (original or further) issue of securities of an Issuer
excepting Mutual Funds, which is listed on the NSE unless the Issuer deposits and
keeps deposited with the NSE (in cases where the securities are offered for subscription,whether through the issue of a prospectus, letter of offer or otherwise, and NSE is the
Regional Stock Exchange for the Issuer) an amount calculated at 1% of the amount of
securities offered for subscription to the public and or to the holders of existing
securities of the Issuer, as the case may be for ensuring compliance by the Issuer within
the prescribed or stipulated period of all requirements and conditions hereinafter
mentioned and shall be refundable or forfeitable in the manner hereinafter stated:
28
-
7/28/2019 109004579 Finance Project
29/63
1. The Issuer shall comply with all prevailing requirements of law including all
requirements of and under any notifications, directives and guidelines issued by
the Central Government, SEBI or any statutory body or local authority or any
body or authority acting under the authority or direction of the Central
Government and all prevailing listing requirements and conditions of the NSE
and of each recognized Stock Exchange where the Issuer has applied for
permission for admission to dealings of the securities, within the prescribed or
stipulated period;
2. If the Issuer has complied with all the aforesaid requirements and conditions
including, wherever applicable, its obligation under Section 73 (or any statutory
modification or re-enactment thereof) of the Companies Act, 1956 and
obligations arising therefrom, within the prescribed or stipulated period, and on
obtaining a No Objection Certificate from SEBI and submitting it to NSE , NSE
shall refund to the Issuer the said deposit without interest within fifteen days
from the expiry of the prescribed or stipulated period;
3. If on expiry of the prescribed or stipulated period or the extended period
referred to hereafter, the Issuer has not complied with all the aforesaid
requirements and conditions, the said deposit shall be forfeited by the NSE, at
its discretion, and thereupon the same shall vest in the NSE. Provided the
forfeiture shall not release the Issuer of its obligation to comply with the
aforesaid requirements and conditions;
4. If the Issuer is unable to complete compliance of the aforesaid requirements and
conditions within the prescribed or stipulated period, the NSE, at its discretion
and if the Issuer has shown sufficient cause, but without prejudice to the
obligations of the Issuer under the laws in force to comply with any such
requirements and conditions within the prescribed or stipulated period, may not
forfeit the said deposit but may allow such further time to the Issuer as the NSE
may deem fit; provided that
a. the Issuer has at least ten days prior to expiry of the prescribed or
stipulated period applied in writing for extension of time to the NSE
stating the reasons for non-compliance, and
29
-
7/28/2019 109004579 Finance Project
30/63
b. the Issuer, having been allowed further time by the NSE, has before
expiry of the prescribed or stipulated period, published in a manner
required by the NSE, the fact of such extension having been allowed;
provided further that where the NSE has not allowed extension in
writing before expiry of the prescribed or stipulated period, the request
for extension shall be deemed to have been refused; provided also that
any such extension shall not release the Issuer of its obligations to
comply with the aforesaid requirements and conditions.
2. 50% of the above mentioned security deposit should be paid to the NSE in cash.
The balance amount can be provided by way of a bank guarantee, in the format
prescribed by or acceptable to NSE. The amount to be paid in cash is limited to
Rs.3 crores
Submission of Application (Supporting Documents)
Issuers applying for admission of their securities to dealings on the NSE shall submit to
the NSE the following:
Documents and Information
The documents and information prescribed in Appendix D or Appendix I (as thecase may be) to this Regulation or such other documents and information as the
Relevant Authority may from time to time prescribe, in addition thereto or in
modification or substitution thereof together with any other documents and
information which the Relevant Authority may require in any particular case;
Distribution Schedules
Distribution Schedules duly completed in respect of each class and kind of
security in the form prescribed in Appendix E (Table I, II & III) to this
Regulation or in such other form or forms as the Relevant Authority may from
time to time prescribe in addition thereto or in modification or substitution
thereof.
Listing conditions and requirements
All Issuers whose securities are listed on the NSE shall comply with the listing
conditions and requirements contained in the Listing Agreement Form appearing in
30
-
7/28/2019 109004579 Finance Project
31/63
Appendix F to this Regulation or such other conditions and requirements as the
Relevant Authority may from time to time prescribe in addition thereto or in
modification or substitution thereof.
31
-
7/28/2019 109004579 Finance Project
32/63
ASX - AUSTRALIA
Listing on ASX
Organisations listing Procedure at ACX:
The timetable for listing depends on the complexity and scale of the transaction,how quickly the listing can be prepared and how quickly funds are received from
investors. The amount of time taken to list can range from three months to two years,
with six months being typical.
ADVANTAGE ON ASX
In addition to these benefits, the choice of ASX as the market on which to list offers
particular advantages.
Scale As the 8th largest equity market in the world, ASX is able to attract
international investors.
Reputation - ASX has an international reputation for conducting markets of
integrity, ensuring vital investor confidence in our markets.
World class systems ASX markets are driven by leading edge electronic
trading, settlement and registry systems.
Inclusion in S&P/ASX indices organisations listed on ASX may be includedin a range of S&P/ASX indices. Many institutions use indices as a benchmark
for the performance of their investment funds, and portfolios will hold shares
included in that index.
Organization must also meet specific requirements set out in the ASX listing rules in
order to be eligible to list. These requirements include a set of minimum admission
criteria, including structure, size and number of shareholders.
Key criteria for organisation needed to be eligible for listing:
Admission criteria General requirement
Number of shareholders
Minimum 500 investors @ A$2000
or
Minimum 400 investors @ A$2000 and
25% held by unrelated parties
Company size A$1 million net profit over past 3 years +
32
-
7/28/2019 109004579 Finance Project
33/63
Profit test
Asst test
A$400,000 net profit over last 12 months
or
A$2 million Net Tangible Assets
or
A$10 million market capitalisation
Cost of Listing :
ASX Equity Listing Fees are linked to organizations value - that is, the amount of
capital raised and the total market capitalization of organization.
Most organizations listing are subject to the following three types of Equity ListingFees:
1. Initial Listing Fees payable at the time of listing the organization.
2. Annual Listing Fees payable annually by the organization to remain listed
3. Subsequent Listing Fees payable if the organization raises additional capital
once listed.
It should be noted that at the time of (initial) listing, the organization will need to pay an
Initial Listing Fee and a pro-rata Annual Listing Fee for the remainder of the financial
year. In the following financial years, the full Annual Listing Fee will apply.
ASXs Initial and Annual Listing Fees are calculated based on an organisations total
capitalisation, whereas Subsequent Listing Fees are based on the amount of capital
raised. The following example illustrates the difference:
Company X decides to List. Company X has 100 shares on issue, of which the owners
decide to sell 50 at $1.00 each to raise $50.00. For this IPO, Company X will pay an
Initial Listing Fee and a pro-rata Annual Listing Fee.
Although only $50.00 was raised, Initial and pro-rata Annual Listing Fees are calculated
using Company Xs total market capitalisation of $100.00 (being 100 shares at $1.00
each).
33
-
7/28/2019 109004579 Finance Project
34/63
The following year, Company Xs share rises to $1.20. The Annual Listing Fee is
calculated based on the total market capitalisation of $120.00 (being 100 shares at $1.20
each).
Later that year, Company X decided to raise an additional $23.00 to buy (for cash)Company Y. To fund this acquisition, Company X issues 20 new shares at $1.15 each.
Company Xs Subsequent Listing Fee is calculated based on the amount of new capital
raised ($23.00).
One should also consider that there are other non-ASX costs associated with Listing and
raising capital.
This information is provided for general information purposes only. Some exceptions to
the policy described above exist different fee schedules will apply in the cases of debt
listings, Foreign Exempt Listings, and those listed funds choosing to pay fees according
to the Listed Managed Investments fee schedule.
ASX Equity Listings Fee Calculator
Choose a Fee Calculation
Number of Securities1,000
Value Per Security$ . $1.000Total Value
$1,000.00Initial Fee Payable $
$13,310
ASX Equity Listings Fee CalculatorChoose a Fee Calculation
Number of Securities1,000
Value Per Security$ . $1.000Already Listed?Total Value
$1,000.00Annual Fee Payable $
$7,450
ASX Equity Listings Fee Calculator
34
-
7/28/2019 109004579 Finance Project
35/63
Choose a Fee Calculation
Number of Securities1,000
Value Per Security$ . $1.000Total Value
$1,000.00Subsequent Fee Payable $
$1,200
For initial public offering (IPO) the following steps involved:
Step 1: Appoint advisers
Step 2: Talk to ASX
Step 3: Prepare and lodge prospectus
Step 4: Apply to list
Step 1: Appoint advisers
Professional advisers play an integral role in achieving a successful listing. They can
help with a wide range of issues including legal, financial, accounting, valuation,
prospectus preparation, due diligence, underwriting and marketing of the IPO. There are
also specialist advisers such as independent valuation experts for specific industriessuch as the mining industry.
Professional advisers may be able to assist with:
Corporate structure, prospectus, and legal matters - can include the structure
of the management and board, Corporate governance structures, the
organisation's constitution, prospectus preparation and the due diligence process
Financial matters can include preparation of historical accounts, forecasts,
taxation issues and the valuation of assets
Marketing and distribution of securities can include management of the
IPO, pricing of the issue, underwriting, marketing of the issue and allocation of
securities
Communication can include investor relations, public relations and
Government relations
Key advisers who can assist in these areas include:
35
-
7/28/2019 109004579 Finance Project
36/63
Stockbrokers and Investment Banks - offer advisory services that can assist
with the management of the listing process
Underwriters agree to purchase any shares not taken up by investors under
the IPO, to ensure the receipt of sufficient funds
Lawyers assist with the legal aspects of a float
Accountants advise on such aspects of the float as financial, taxation and
valuation issues
Share registries manage the register of share holders, process applications for
the IPO and handle the share register on an ongoing basis
Communications and Investor Relations consultants can liaise with
members of the media to ensure that the float gets sufficient press coverage, and
organise investor roadshows
Other experts depending on the nature of listing, other experts may be of
assistance to provide specialist advice or reports, such as independent expert
reports or real estate valuations
Step 2: Talk to ASX
There are usually numerous regulatory, structural and organisation constitutional issues
that need to be aware of prior to listing. ASX recognises that all organisations are
different, and we encourage to meet with us to discuss specific circumstances.
A. At a preliminary stage - The ASX listings business development team is able
to visit to find out more about your business, and to help with general guidance
on the IPO process and role in that process.
B. At a more advanced stage - If one decide that listing on ASX is the correct
course for his business, then experienced listings operations team can answerther queries regarding the ASX Listing Rules and general business issues
including:
Constitution documents
Whether ASX would be likely to treat any securities as restricted and apply
escrow provisions
Related Party transactions
Employee incentive schemes
36
-
7/28/2019 109004579 Finance Project
37/63
Management agreements
Listing timetables
Meeting initial and ongoing listing rule obligations generally
Step 3: Prepare and lodge a prospectus
A prospectus is a document issued by a company setting out the terms of its equity issue
(or debt raising). It provides the background, financial and management status of the
company so that investors are able to make an informed decision about whether to
invest. In most cases, a prospectus or similar disclosure document is required to list.
The prospectus must be lodged with both the Australian Securities and Investments
Commission (ASIC) and ASX.
Amongst other things, a prospectus is required to contain all information that investors
and their advisers would require to make an informed assessment of:
The assets, liabilities, financial position, profits and losses, and prospects of the
organisation; and
The rights attaching to the shares.
The due diligence process surrounds the preparation of the prospectus, allowing all
parties to satisfy themselves of their legal responsibilities and the structure of the
transaction.
Step 4: Apply to list
Having prepared and lodged prospectus with ASIC, one is now able to submit his
listing application to ASX.
The application form is contained in the ASX Listing Rules and must be received by
ASX within seven days of lodging prospectus with ASIC.
ASX will review the application and prospectus to ensure that it satisfies the ASX
Listing Rules. ASX Listings Advisers may seek additional information to assess the
application and ensure that sufficient information is available for investors to make
informed decisions once organisations shares start trading.
37
-
7/28/2019 109004579 Finance Project
38/63
38
-
7/28/2019 109004579 Finance Project
39/63
Bursa Malaysia - MALAYSIA
History :
The first formal securities business organisation in Malaysia was the Singapore
Stockbrokers' Association, established in 1930. It was re-registered as the Malayan
Stockbrokers' Association in 1937. The Malayan Stock Exchange was established in
1960 and the public trading of shares commenced. The board system had trading rooms
in Singapore and Kuala Lumpur, linked by direct telephone lines.
In 1964, the Stock Exchange of Malaysia was established. With the secession of
Singapore from Malaysia in 1965, the Stock Exchange of Malaysia became known as
the Stock Exchange of Malaysia and Singapore. In 1973, currency interchangeability
between Malaysia and Singapore ceased, and the Stock Exchange of Malaysia and
Singapore was divided into the Kuala Lumpur Stock Exchange Berhad and the Stock
Exchange of Singapore. The Kuala Lumpur Stock Exchange which was incorporated on
December 14, 1976 as a company limited by guarantee, took over the operations of the
Kuala Lumpur Stock Exchange Berhad in the same year.
On April 14, 2004, we changed our name to Bursa Malaysia Berhad, following our
demutualization exercise, the purpose of which was to enhance our competitive position
and to respond to global trends in the exchange sector by making us more customer-
driven and market-oriented. We are focused on various initiatives aimed at improving
our product and service offerings, increasing the liquidity and velocity of our markets,
improving the efficiency of our businesses and achieving economies of scale in our
operations.
On 18 March 2005, Bursa Malaysia was listed on the Main Board of Bursa Malaysia
Securities Berhad.
We accomplished double achievements when the exchange received certifications for
conformance to the ISO 9001:2000 Quality Management System and ISO 14001:2004
Environmental Management System standards on 5 October 2007.
39
-
7/28/2019 109004579 Finance Project
40/63
Listing on Bursa Malaysia :
Advantage To List on Bursa Malaysia
1. Major investment destination for global fund managers.
2. Valuation is comparable to regional exchanges and relatively higher on niche
sectors.
3. Pro-active investor relations programmes facilitated by Bursa Malaysia.
4. Mature and liquid market.
5. Established regulatory structure benchmarked internationally.
6. Cost effective listing desti.nation.
7. Excellent technology and trading platform.
8. Local institutions and retailers actively seek quality investments.
9. Access to Mid East liquidity.
Listing Process :
The listing process (from the time one engage an adviser to the day of listing) will
normally take four to six months, depending on the structure and complexity of the
listing scheme. Upon approval, one will be given 6 months to choose the right time to
list.
The conceptual timeline for the listing process is as follows:-
40
-
7/28/2019 109004579 Finance Project
41/63
Listing Criteria :
Bursa Malaysia offers three (3) boards, Main Board, Second Board and MESDAQ
Market. Generally, Main Board is for more established companies, Second Board for
relatively smaller companies and MESDAQ Market is for high growth and technology
companies.
Both the Second Board and MESDAQ Market provide an avenue for relatively smaller
companies to access the capital market early to fuel their expansion plans. Once
established, they can transfer their listing status to the Main Board.
The summary of the relevant listing criteria as stipulated in the Guidelines on the
Offering of Equity and Equity-Linked Securities issued by the Securities
Commission(SC) are as follows:-
Notes:-
1. The complete criteria and guidelines in relation to Listing are available atSecurities
Commission website .
2. The Bursa Malaysia Listing Requirements forMain Board and Second Board
(including Foreign Listing).
3. The Bursa Malaysia Listing Requirements forMESDAQ Market .
Cost of Listing :
The costs of raising equity through an initial public offering vary for Main Board,
Second Board and MESDAQ Market. Some of the key components in the total IPO
expenses are:-
Professional fees, which range from RM500,000 to RM900,000, subject to negotiation
41
http://www.sc.com.my/http://www.sc.com.my/http://www.sc.com.my/http://www.bursamalaysia.com/website/bm/rules_and_regulations/listing_requirements/mbsb/http://www.bursamalaysia.com/website/bm/rules_and_regulations/listing_requirements/MESDAQ_Market/http://www.klse.com.my/website/bm/bursa_basics/listing_bm/foreign_qualitative.htmlhttp://www.klse.com.my/website/bm/bursa_basics/listing_bm/foreign_quantitative.htmlhttp://www.klse.com.my/website/bm/bursa_basics/listing_bm/local_qualitative.htmlhttp://www.klse.com.my/website/bm/bursa_basics/listing_bm/local_quantitative.htmlhttp://www.sc.com.my/http://www.sc.com.my/http://www.bursamalaysia.com/website/bm/rules_and_regulations/listing_requirements/mbsb/http://www.bursamalaysia.com/website/bm/rules_and_regulations/listing_requirements/MESDAQ_Market/ -
7/28/2019 109004579 Finance Project
42/63
Underwriting, placement and brokerage fees, which range from 1% to 3% of the value
of the shares, subject to negotiation
Regulatory fees
Securities Commission
Processing fee : RM50,000 + 0.05% of the enlarged issued and paid-up share capital
Fee for submission of Prospectus : RM10,000
Fee for registration of Prospectus : RM5,000
Bursa Malaysia
Main Board & Second Board MESDAQ Market
Initial ListingFee
0.01% of market value ofissued capital
Minimum of RM20,000
Maximum of RM200,000
0.01% of market value of issuedcapital
Minimum of RM10,000
Maximum of RM20,000
Annual
Listing Fee
0.0025% of market value of
issued capital
Minimum of RM20,000
Maximum of RM100,000
Nominal value of issued capital as at
31 December
Less than RM50 million :
RM10,000
More than RM50 million :
RM20,000
Other expenses such as printing and advertisement which range from RM100,000 to
RM400,000, subject to negotiation.
42
-
7/28/2019 109004579 Finance Project
43/63
SINGAPORE - SGX
Process/Timeframe :
SGX is a dedicated partner to grow with its listed companies. As a listed company
itself, SGX understands the concerns and the value of a listing. It understands that its
business is to help its listed companies get the most value out of a listing, which goes
beyond raising capital. At every step of the joining process, SGX ensures a potential
listed company has all the support and information needed to make the right decisions
for the business. As such, SGX continually strives to create an international marketplace
where its listed companies can realise their full potential.
Pre-Joining :
Step 1: Introduction to SGX
Understand the companys capital needs
Help the company understand SGX and the benefits of various listing options
Support the company to decide whether joining one of SGXs markets is right
Step 2: Pre-Submission Consultation
Provide guidance on the listing process, regulatory framework and corporate
governance best practices
Work with the issuer to resolve potential issues
Post-Joining :
Step 3: Profile Enhancement
Help the company raise its profile in the investment community through the
Research Incentive Scheme, investor seminars and overseas roadshows to meet
institutional investors
Step 4: Secondary Fund-Raising
43
http://research.sgx.com/http://research.sgx.com/ -
7/28/2019 109004579 Finance Project
44/63
Provide a conducive marketplace for the company to raise secondary funds
efficiently to support its continual growth
Listing Process
A company initiates the listing process by appointing a Singapore-based financial
institution to be its sponsor and lead manager. The lead manager is usually a member
company of SGX, a merchant bank or other similar institutions acceptable to SGX.
The lead manager will assume an active role and prepare the company for listing.
Besides managing the launch, the lead manager also submits the listing application on
behalf of the company. In addition, the lead manager will liaise with SGX on all mattersarising from the application for listing.
Apart from the lead manager, the company needs to appoint a lawyer to oversee the
legal aspects of listing. In addition, the appointed Certified Public Accountant will
provide the company with an initial evaluation of its readiness to go public, assist in
upgrading its management capabilities and in preparing the launch. Prior to and during
the launch, the company will have to engage the service of an experienced public
relations firm to help enhance its appeal and convey its corporate messages effectively
to the investing public.
IPO Timeline
Prior to submission of the listing application, the company is advised to consult SGX to
resolve any specific issues. This will speed up the listing process and reduce any
additional costs that may arise due to a delay. The timeframe for a listing varies for
different companies, ranging from two months to two years. On the average, the whole
process should last about 12 to 18 weeks. Given that time is of the essence, the
company should budget a reasonable amount of management time and appoint the
appropriate professionals to assist in the listing process.
The indicative timeline for the listing process is as follows:
44
-
7/28/2019 109004579 Finance Project
45/63
LISTING REQUIREMENTS
Methods of Listing :
1. Primary Listing :
Companies must meet SGXs initial listing requirements outlined below for
either a Mainboard or SESDAQ listing.
After listing, companies have to comply with all SGXs continuing listing
obligations
45
-
7/28/2019 109004579 Finance Project
46/63
2. Secondary Listing :
Companies that are already listed on another exchange of equivalent rules as
SGX are able to seek a secondary listing on SGX without having to comply withSGXs continuing listing obligations.
3. Global Depository Receipts :
An international company that is already listed on its home exchange can also
choose to list and raise funds on SGX via GDRs.
As GDRs are specialist products offered only to institutional and accredited
investors, GDR listing requirements are relatively less demanding compared
with primary and secondary listings where retail participation is allowed.
Please clickhere for details.
IPO or Introduction
Whether a company is listing on SGX on a primary or secondary basis, the offering at
the point of listing can be done in following ways:
IPO :
Issue of new shares or offer of existing shares to the investing public.
A prospectus has to be lodged with MAS and prepared in accordance with the
Securities and Futures Regulations (SFR).
During the course of the listing process, the prospectus will be subject to public
comments for approximately 3 to 4 weeks. (This may be extended at the
discretion of MAS.)
Introduction :
No shares are offered to the investing public.
Suitable for companies that may not require funds at the point of listing.
46
http://www.sgx.com/listinggdrshttp://www.sgx.com/listinggdrs -
7/28/2019 109004579 Finance Project
47/63
An introductory document needs to be lodged with MAS and prepared in
accordance with SFR.
The introductory document is not subject to public comments.
Mainboard Requirements
PTO
47
-
7/28/2019 109004579 Finance Project
48/63
Criteria 1 Criteria 2 Criteria 3
Pre-Tax Profits Cumulative pre-tax profit of at least $7.5 mn over
the last 3 consecutive years, with a pre-tax profit of
at least $1 mn in each of those 3 years
Cumulative pre-tax profit of at least $10
million for the latest 1 or 2 years
NA
Market Capitalisation NA NA Market capitalisation of at least $80
mn at the time of the initial public
offering, based on the issue price
Shareholding Spread 25% of issued shares in the hands of at least 1000 shareholders
(For market capitalisation > S$300 million, shareholding spread will varies between 12-20%). 2000 shareholders worldwide in the
case of a secondary listing
Operating Track Record 3 years NA NA
Continuity of
Management
3 years 1 or 2 years as the case may be NA
Accounting Standard Singapore, US or International Accounting Standards
Continuing Listing
Obligations
Yes Yes Yes
Waiver from having to comply with continuing listing obligations if listed on another recognised foreign stock exchange.
Domicile At the discretion of the issuer Trading and Reporting Currency At the discretion of the issuer
Business Operations No requirement for operations in Singapore
Independent Directors At least 2 residents in Singapore
48
-
7/28/2019 109004579 Finance Project
49/63
Sesdaq Requirements
Smaller companies may choose to list on Sesdaq, which has no quantitative requirements. Companies listed here may apply for transfer to the Mainboard
when it meets the latters requirements in the future.
Pre-tax Profits Nil
Business is expected to be viable and profitable, with good growth prospects.
Paid Up capital NA
Track Record A company with no track record has to demonstrate that it requires funds to finance a project or develop a product, which must
have been fully researched and costed.
Shareholding Spread At least 500,000 shares or 15% of issued shares (whichever is greater) in the hands of at least 500 shareholders.
49
-
7/28/2019 109004579 Finance Project
50/63
Other Qualitative Requirements:
Good growth potential;
Healthy cashflow and adequate working capital; and
Strong, capable and credible management team
50
-
7/28/2019 109004579 Finance Project
51/63
USA - NASDAQ
NASDAQ - the largest and most renowned U.S. market. NASDAQ has more listed
companies (approximately 3,200), trades more volume (approximately 2 billion shares
daily) and handles more IPOs (over 500 since 2000) than any other U.S. exchange. In a
recent update of a multi-year study of investors, NASDAQ was the most widely-
recognized stock market, with greater brand recognition than any other U.S. exchange.
And listed companies agree 2005 was the first time in history more companies
switched to NASDAQ from the NYSE than vice versa.
NASDAQ Listing Qualifications
NASDAQ Listing Qualifications (LQ) is headed by Michael Emen, Senior Vice
President, and reports to Edward Knight, Executive Vice President, General Counsel
and Chief Regulatory Officer. LQ promotes the integrity and reputation of The
NASDAQ Stock Market by reviewing all companies for compliance with the initial
and continued listing requirements.
The principal groups within LQ are: the Initial Listings & Structured Financial Products
team, which is headed by Will Slattery; the Continued Listings team, led by Doug
McKenney; Corporate Governance & Listing of Additional Shares, headed by David
Compton; and Listing Investigations, led by Gary Sundick.
Each NASDAQ-listed company is assigned to a specific qualifications analyst who
reviews its SEC or other regulatory filings. This individual is also available to answer
questions regarding the meaning or application of NASDAQs listing requirements.
NASDAQs listing requirements are set forth in the 4000 Series of the Marketplace
Rules and are further explained in ourNASDAQ Listing Standards and Fees and
Regulatory Requirementspublications. There are also over 250 NASDAQ Listing
Qualifications FAQs, which provide additional guidance on our initial and continued
listing policies and procedures.
51
http://www.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=18http://www.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=18http://www.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=18http://www.nasdaq.com/about/nasdaq_listing_req_fees.pdfhttp://www.nasdaq.com/about/RegRequirements.pdfhttp://www.nasdaq.com/about/RegRequirements.pdfhttp://www.nasdaq.com/about/LegalComplianceFAQs.stmhttp://www.nasdaq.com/about/LegalComplianceFAQs.stmhttp://www.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=18http://www.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=18http://www.nasdaq.com/about/nasdaq_listing_req_fees.pdfhttp://www.nasdaq.com/about/RegRequirements.pdfhttp://www.nasdaq.com/about/LegalComplianceFAQs.stmhttp://www.nasdaq.com/about/LegalComplianceFAQs.stm -
7/28/2019 109004579 Finance Project
52/63
Companies considering financing transactions or which have other questions regarding
the specific application of NASDAQs corporate governance requirements can take
advantage of NASDAQs written interpretations program. This is a fee-based process
pursuant to which a company can request a specific written interpretation of
NASDAQs listing rules. NASDAQ staff also review various transactions which are the
subject of filings pursuant to the listing of additional shares program. Companies are
encouraged to call with any questions as early as possible in that process.
Nasdaq Markets
How to List on NASDAQ
To list securities on The NASDAQ Stock Market, a company must submit an
application and meet certain initial quantitative and qualitative requirements. These
listing requirements together with the basic steps of the application processbelow
outline how to list securities on The NASDAQ Global Select MarketSM, The NASDAQ
Global MarketSM or The NASDAQ Capital MarketSM.
Listing Standards
Companies that choose to list their securities on The NASDAQ Stock Market must
meet minimum initial and continued financial requirements. These requirements are
designed to facilitate capital formation for companies worldwide and, at the same time,
to protect investors and prospective investors in those companies.
NASDAQs quantitative listing requirements generally call for companies to meet
higher thresholds for initial listing than continued listing, thus helping to ensure that
companies have reached a sufficient level of maturity prior to listing. NASDAQ also
requires listed companies to meet stringent corporate governance standards, standards to
which NASDAQ itself adheres. NASDAQ listing standards are transparent to
companies and investors alike, and are rigorously enforced.
52
http://www.nasdaq.com/about/StaffInterpLetters.stmhttp://www.nasdaq.com/about/StaffInterpLetters.stmhttp://www.nasdaq.com/about/nasdaq_listing_req_fees.pdfhttp://www.nasdaq.net/PublicPages/ListingProcessMain.aspx#outline%23outlinehttp://www.nasdaq.net/PublicPages/ListingProcessMain.aspx#outline%23outlinehttp://www.nasdaq.com/about/StaffInterpLetters.stmhttp://www.nasdaq.com/about/nasdaq_listing_req_fees.pdfhttp://www.nasdaq.net/PublicPages/ListingProcessMain.aspx#outline%23outline -
7/28/2019 109004579 Finance Project
53/63
NASDAQ MARKETS
NASDAQ Global Select Market
The NASDAQ Global Select Market has the highest initial listing standards of any
stock market in the world. A company must meet specific financial and liquidity
requirements for initial listing and must continue to meet standards to maintain its
listing on the NASDAQ Global Select Market.
NASDAQ Global Market
The NASDAQ Global Market, formerly the NASDAQ National Market, has a new
name that more accurately reflects the global leadership and international reach of this
market and listed companies. A company must meet all initial listing criteria of one of
the three listing standards for initial listing and must continue to meet standards to
maintain its listing on the NASDAQ Global Market.
NASDAQ Capital Market
The NASDAQ Capital Market, formerly the NASDAQ SmallCap MarketSM, was
renamed in 2005 to reflect the core purpose of this market capital formation. Acompany must meet the minimum financial requirements for initial listing and must
continue to meet standards to maintain its listing on the NASDAQ Capital Market.
NASDAQ LISTING APPLICATION GUIDE
PTO
53
-
7/28/2019 109004579 Finance Project
54/63
ACTION RESPONSIBLE PARTY TIMING Submit to: *
Submit:
Application (signed and dated by
company);
Listing Agreement (signed and dated by
company)
Registration Statement (one copy)
Company or companys
counselAt time of application
Apply Online
or mail to A
Submit:
Completed Corporate Governance
Certification Form.
Company or companys
counsel
At time of application. Note: This form need not
necessarily accompany the companys initial
submission.
A
Submit:
$5,000 non-refundable application fee
Entry Fee Payment Form
An estimated entry fee will be calculated byListing Qualifications upon request.
Company or companys
counsel
At time of application. Note: This form need not
necessarily accompany the companys initial
submission.
A
Submit:
$5,000 non-refundable application fee
Company or companys
counsel
The $5,000 non-refundable fee is due at time of
the application. The balance of the entry fee is due
B The company may wire
its fees. Please see
54
https://screening.nasdaq.com/secureaspxcontent/OLACaptureTrackingNumberAndEmailId.aspxhttps://screening.nasdaq.com/secureaspxcontent/OLACaptureTrackingNumberAndEmailId.aspx -
7/28/2019 109004579 Finance Project
55/63
Entry Fee Payment Form
An estimated entry fee will be calculated by
Listing Qualifications upon request.
prior to the commencement of trading. instructions below.
Submit:
Logo Authorization Form and Art.
An estimated entry fee will be calculated by
Listing Qualifications upon request.
Company or companys
counselAt time of application D
Submit:
One marked copy of any amendments to
the registration statement
Copies of all correspondence between the
SEC and the company relating to the filing of
the companys registration statement
Company or companys
counsel
Concurrent with SEC or other regulatory authority
filingA
Provide additional information
Company or companys
counsel Upon request by Listing Qualifications A
Submit:
Copy of Form 8-A
Company or companys
counselConcurrent with SEC filing A
55
-
7/28/2019 109004579 Finance Project
56/63
Provide notice of anticipated effective date of
registration statement
Company or companys
counsel
Notify Listing Qualifications by phone at least
three (3) business days prior to the anticipated
effective date of the registration statement.
A
Confirm security addition
Register market makers
Release security for trading
Underwriter syndicate and
all market makers
Upon effectiveness and pric