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PROJECT REPORT ON

“Listing of securities”

IN PARTIAL FULFILLMENT OF THE REQUIREMENT


FOR
THE COURSE MASTER OF MANAGEMENT STUDIES

UNIVERSITY OF MUMBAI

SPECIALISATION:
Finance

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INDEX

SR NO. TITLE PAGE


NO.
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

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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 organisation’s
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 organisation’s 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.

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• 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 organisation’s 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.

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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.

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ELIGIBILITY CRITERIA FOR IPOs/FPOs

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

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waived if a financial institution or a scheduled commercial bank
has appraised the project in the preceding 12 months.

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).

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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%.
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.

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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.

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 Registered
Office 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.

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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.

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. Particulars Amount
No. (Rs.)
1 Initial Listing Fees 20,000
2 Annual Listing Fees
(i) Companies with listed capital* upto Rs. 5 crores
10,000
(ii) AboveRs. 5 crores and upto Rs. 10 crores
15,000
(iii) Above Rs. 10 crores and upto Rs. 20 crores
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

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equity shares.

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
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 quarterly results, 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

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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 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 Bombay Stock Exchange Limited
Name
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

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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. Drawee state the bank on which cheque is drawn
Bank
7. Drawn on Mention the location of the drawee bank.
Location
8. Pickup Not applicable
Location
9. No. of Insts Not applicable

NSE - INDIA
Benefits of Listing on NSE

• A premier market place

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• 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

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. NSE’s 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

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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 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 centers


Six investor-service centers opened by NSE across the country cater to the needs of
investors.

Nominal listing fees

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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

NSE staff welcome the opportunity to discuss a company’s 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 applicant’s 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

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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 for
listing. 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).
• 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:

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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 applicant’s 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 company’s application for listing. The
auditor’s 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 applicant’s/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

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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 of
listing

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 applicant’s 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

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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 applicant’s 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.
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)

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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).
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

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(Acquisition and Transfer of Undertakings) Act, 1980, State Bank of India
Act, 1955 and the State 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.”

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:

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 The applicant, promoters/promoting company(ies), group
companies, companies promoted by the promoters/promoting
company(ies) track record in redressal of investor grievances

 The applicant’s 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 company’s
application for listing. The auditor’s 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 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)

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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
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

24
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.


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:

25
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
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.

26
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
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.

27
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

The listing fees depend on the paid up share capital of the Company:

Particulars Amount (Rs.)


Initial Listing Fees 7,500
Annual Listing Fees
Companies 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

28
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:

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

29
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

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

30
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
the case 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
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
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
included in 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


Minimum 500 investors @ A$2000
or
Number of shareholders
Minimum 400 investors @ A$2000 and
25% held by unrelated parties
Company size A$1 million net profit over past 3 years +

32
A$400,000 net profit over last 12 months
or
Profit test
A$2 million Net Tangible Assets
or
Asst test
A$10 million market capitalisation

Cost of Listing :

ASX Equity Listing Fees are linked to organization’s 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 Listing
Fees:

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.

ASX’s Initial and Annual Listing Fees are calculated based on an organisation’s 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 X’s total market capitalisation of $100.00 (being 100
shares at $1.00 each).

33
The following year, Company X’s 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 X’s 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 Securities
1,000
Value Per Security
$ . $1.000
Total Value
$1,000.00
Initial Fee Payable $
$13,310

ASX Equity Listings Fee Calculator


Choose a Fee Calculation

Number of Securities
1,000
Value Per Security
$ . $1.000

Already Listed?
Total Value
$1,000.00
Annual Fee Payable $

34
$7,450
ASX Equity Listings Fee Calculator
Choose a Fee Calculation

Number of Securities
1,000
Value Per Security
$ . $1.000
Total Value
$1,000.00
Subsequent 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
industries such 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

35
• Communication – can include investor relations, public relations and
Government relations

Key advisers who can assist in these areas include:

• 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 answer
ther queries regarding the ASX Listing Rules and general business issues
including:

• Constitution documents

36
• Whether ASX would be likely to treat any securities as restricted and apply
escrow provisions
• Related Party transactions
• Employee incentive schemes
• 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

37
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.

38
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
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
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 at Securities
Commission website .
2. The Bursa Malaysia Listing Requirements for Main Board and Second Board
(including Foreign Listing).
3. The Bursa Malaysia Listing Requirements for MESDAQ 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
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 Listing 0.01% of market value of 0.01% of market value of issued
Fee issued capital capital
Minimum of RM20,000 Minimum of RM10,000
Maximum of RM200,000 Maximum of RM20,000
Annual 0.0025% of market value of Nominal value of issued capital as
Listing Fee issued capital at 31 December
Minimum of RM20,000 Less than RM50 million :
Maximum of RM100,000 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
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 company’s capital needs


• Help the company understand SGX and the benefits of various listing options
• Support the company to decide whether joining one of SGX’s 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
• ·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
matters arising 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
LISTING REQUIREMENTS

Methods of Listing :
1. Primary Listing :

• Companies must meet SGX’s initial listing requirements outlined below for
either a Mainboard or SESDAQ listing.
• After listing, companies have to comply with all SGX’s continuing listing
obligations

45
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
with SGX’s 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 click here 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
• 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
Criteria 1 Criteria 2 Criteria 3
Pre-Tax Profits Cumulative pre-tax profit of at least $7.5 mn over Cumulative pre-tax profit of at least $10 NA
the last 3 consecutive years, with a pre-tax profit million for the latest 1 or 2 years
of at least $1 mn in each of those 3 years
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 3 years 1 or 2 years as the case may be NA
Management
Accounting Standard Singapore, US or International Accounting Standards
Continuing Listing Yes Yes Yes
Obligations 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
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 latter’s 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.

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Other Qualitative Requirements:

• Good growth potential;


• Healthy cashflow and adequate working capital; and
• Strong, capable and credible management team

50
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 NASDAQ’s listing requirements.

NASDAQ’s listing requirements are set forth in the 4000 Series of the Marketplace
Rules and are further explained in our NASDAQ Listing Standards and Fees and
Regulatory Requirements publications. There are also over 250 NASDAQ Listing
Qualifications FAQ’s, which provide additional guidance on our initial and continued
listing policies and procedures.

51
Companies considering financing transactions or which have other questions
regarding the specific application of NASDAQ’s corporate governance requirements
can take advantage of NASDAQ’s written interpretations program. This is a fee-based
process pursuant to which a company can request a specific written interpretation of
NASDAQ’s 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 process below
outline how to list securities on The NASDAQ Global Select Market SM, 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.

NASDAQ’s 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
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. A
company 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
ACTION RESPONSIBLE PARTY TIMING Submit to: *

Submit:
• Application (signed and dated by
company); Company or company’s Apply Online
At time of application
• Listing Agreement (signed and dated by counsel or mail to A
company)
• Registration Statement (one copy)

Submit: At time of application. Note: This form need not


Company or company’s
• Completed Corporate Governance necessarily accompany the company’s initial A
counsel
Certification Form. submission.

Submit:
• $5,000 non-refundable application fee At time of application. Note: This form need not
Company or company’s
• Entry Fee Payment Form necessarily accompany the company’s initial A
counsel
An estimated entry fee will be calculated by submission.

Listing Qualifications upon request.

Submit: Company or company’s The $5,000 non-refundable fee is due at time of B – The company may wire
• $5,000 non-refundable application fee counsel the application. The balance of the entry fee is due its fees. Please see

54
• Entry Fee Payment Form
An estimated entry fee will be calculated by prior to the commencement of trading. instructions below.
Listing Qualifications upon request.

Submit:
• Logo Authorization Form and Art. Company or company’s
At time of application D
An estimated entry fee will be calculated by counsel
Listing Qualifications upon request.

Submit:
• One marked copy of any amendments
to the registration statement Company or company’s Concurrent with SEC or other regulatory authority
A
• Copies of all correspondence between counsel filing
the SEC and the company relating to the
filing of the company’s registration statement

Company or company’s
Provide additional information Upon request by Listing Qualifications A
counsel

Submit: Company or company’s


Concurrent with SEC filing A
• Copy of Form 8-A counsel

55
Notify Listing Qualifications by phone at least
Provide notice of anticipated effective date of Company or company’s
three (3) business days prior to the anticipated A
registration statement counsel
effective date of the registration statement.

• Confirm security addition


Underwriter syndicate and Upon effectiveness and pricing, notify Corporate
• Register market makers C
all market makers Data Operations by phone.
• Release security for trading

Company or company’s
Provide notice of effectiveness and pricing Notify Listing Qualifications by phone. A
counsel

Submit:
Company or company’s
• Final registration statement or As soon as available A
counsel
prospectus (1 copy)

56
Listing on NASDAQ for International Companies

Listing on NASDAQ gives international companies high visibility and access to a


diverse pool of investors worldwide. In addition, NASDAQ promotes corporate
growth and entrepreneurship by providing companies, market participants and
investors with one of the highest quality equity markets in the world.

The U.S. securities markets offer companies access to the richest source of capital in
the world as a result of their size, credibility and pool of enthusiastic investors. At the
same time, taking a company through a public offering in the U.S. is a major
undertaking and presents challenges to companies seeking access to this capital.

Recent changes in U.S. securities law require companies to show their ability to
manage control of their systems, operations and financial well being, and to
demonstrate integrity, transparency and accountability in all aspects of their business.
However, by this same account, a U.S. listing demonstrates to the financial
community that a company is among the best run companies in the world.

Considerations for listing on a U.S. stock market

U.S. securities markets offer companies multiple benefits, including supplying the
world’s richest source of capital. Listing in the U.S. can provide a company with an
infusion of cash to increase shareholder value and fuel long-term growth. Some
significant benefits include:

• U.S. stock exchanges provide retail and institutional investors with access to
U.S. capital markets, which are the largest and most liquid in the world.
• Currency becomes available for U.S. and global acquisitions. There may also
be a lowered cost of capital through accessing U.S. debt and commercial paper
markets.
• Having a stock option program can help attract and retain the most talented
employees.
• Listing on a U.S. exchange provides company with multiple marketing
benefits, including increased international visibility and credibility, broader brand
name awareness and an enhanced reputation.

57
• The stringent disclosure standards required by U.S. stock exchanges can help
generate increased investor confidence.

American Depositary Receipts (ADRs) and Other Listing Strategies

Many public offerings by non-U.S. companies are in the form of depositary receipts,
usually as American Depositary Receipts (ADRs). ADRs support distribution and
trading of existing shares of stock and capital raising. Each ADR generally represents
a multiple or fraction of the underlying securities and is quoted in American dollars.
ADRs transfer ownership while continuing to be the registered holder of the
underlying securities. They generally are structured so that the trading price for a
company’s ADR will be in the range of U.S. $10 to $30. In addition to ADRs, a
company can establish other structures that will allow it to list common shares in the
U.S.

Listing on NASDAQ for International Companies

Listing on NASDAQ gives international companies high visibility and access to a


diverse pool of investors worldwide. In addition, NASDAQ promotes corporate
growth and entrepreneurship by providing companies, market participants and
investors with one of the highest quality equity markets in the world.

The U.S. securities markets offer companies access to the richest source of capital in
the world as a result of their size, credibility and pool of enthusiastic investors. At the
same time, taking a company through a public offering in the U.S. is a major
undertaking and presents challenges to companies seeking access to this capital.

Recent changes in U.S. securities law require companies to show their ability to
manage control of their systems, operations and financial well being, and to
demonstrate integrity, transparency and accountability in all aspects of their business.
However, by this same account, a U.S. listing demonstrates to the financial
community that a company is among the best run companies in the world.

Considerations for listing on a U.S. stock market

U.S. securities markets offer companies multiple benefits, including supplying the
world’s richest source of capital. Listing in the U.S. can provide a company with an

58
infusion of cash to increase shareholder value and fuel long-term growth. Some
significant benefits include:

U.S. stock exchanges provide retail and institutional investors with access to U.S. capital
markets, which are the largest and most liquid in the world.
Currency becomes available for U.S. and global acquisitions. There may also be a
lowered cost of capital through accessing U.S. debt and commercial paper markets.
Having a stock option program can help attract and retain the most talented employees.
Listing on a U.S. exchange provides company with multiple marketing benefits,
including increased international visibility and credibility, broader brand name
awareness and an enhanced reputation.
The stringent disclosure standards required by U.S. stock exchanges can help generate
increased investor confidence.
American Depositary Receipts (ADRs) and Other Listing Strategies

Many public offerings by non-U.S. companies are in the form of depositary receipts,
usually as American Depositary Receipts (ADRs). ADRs support distribution and
trading of existing shares of stock and capital raising. Each ADR generally represents
a multiple or fraction of the underlying securities and is quoted in American dollars.
ADRs transfer ownership while continuing to be the registered holder of the
underlying securities. They generally are structured so that the trading price for a
company’s ADR will be in the range of U.S. $10 to $30. In addition to ADRs, a
company can establish other structures that will allow it to list common shares in the
U.S.

59
UK - FTSE
LISTING EQUITY :
Primary listing :
The Main Market offers companies the choice between a primary listing and a
secondary listing.

A primary listing requires a company to meet the highest standards of regulation and
disclosure in Europe; it is not necessarily that company’s first or sole listing.

A primary listing means the company is expected to meet the UK’s gold standard –
described as super-equivalent to the EU directives and implemented as part of the
Financial Services Action Plan - and as a consequence may enjoy a lower cost of
capital through greater investor involvement. A company which is already listed in its
home jurisdiction may choose a primary listing in the UK without relinquishing its
home listing.

Only ordinary shares can be primary listed (debt and Depositary receipts (DRs)
cannot).

Modified rules

Some companies seeking a primary listing have business models that make it difficult
to demonstrate compliance with the normal eligibility requirements in terms of track
record and controlling interest. To help these companies, the UKLA has created
modified rules for 'scientific research based companies' and 'mineral companies'.

Listing Categories

The FSA assigns an listing category to all securities admitted to the Official List – i.e.
primary or secondary. Please click here to access a list of all Main Market securities
with details of the relevant listing category or please click here to access FSA's
Official List.

60
FTSE UK Index Series

Primary listed Main Market companies are potentially eligible for the FTSE UK Index
Series, including the well-known FTSE 100 Index - one of the most widely recognised
in the world.

Inclusion in the FTSE UK Index Series is determined by FTSE according to published


ground rules. The FTSE UK Index Series is open to eligible primary listed Main
Market companies. Secondary listed companies and DRs are not eligible for inclusion
in the FTSE UK Index Series.

Secondary listing

A secondary listing allows issuers to access the Main Market while meeting EU
harmonised standards as opposed to the full ‘super-equivalent’ requirements.

Equity and DRs can be secondary listed, although this option is not available to UK
incorporated companies.

A secondary listing does not automatically mean a company’s second listing, rather it
signifies that the company has chosen to meet EU harmonised standards as opposed to
the UK super-equivalent standards required by a primary listing.

Secondary listings (equity & depositary receipts) are typically only offered to
professional investors.

The secondary listing route is also suitable for companies wishing to ‘passport’ their
prospectus into the UK. Click here for more information on ‘passporting’.

Fees calculator
Annual fees are payable by all companies whose equity securities or certificates
representing shares are admitted to trading. For companies joining the market after 1st
April, a pro-rata annual fee will be due.

61
Fees calculator (Main Market, PSM, Specialist Fund Market and other)
Fees calculator (AIM)
To obtain the pro-rata annual fee, calculate the number of calendar days, including the
date of admission to trading, up to and including 31 March; divide by 366 and
multiply the result with the annual fee.

Fees calculator for Main Market, Professional Securities Market, Specialist Fund
Market and other securities admitted to trading
Admission fees are payable on all applications for trading securities on the Exchange's
markets. Insert the number of shares and opening price - or just insert the market
capitalisation value - of the securities being admitted to trading.

Admission fees - New company issuing ordinary shares

Opening price Market Admission Fee


Number of shares (£) capitalisation (£) (£)
100 50.00 5,000.00 5,870.00
Every new company joining the market after 1st April will also have to pay a pro-
rated annual fee. To obtain the fee, the number of calendar days are taken, including
the date of admission to trading up to and including 31 March, this number is divided
by 365 , and the number multiplied by the fee.

Date:

Select:
United Kingdom
International Company
Company

Pro-rated annual fee (£) 3,860.00

Fees calculator for AIM companies and nominated advisers


An admission fee is payable by all companies seeking admission to AIM or where an
enlarged entity seeks admission to AIM following a reverse takeover under Rule 14 of

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the AIM Rules for Companies. The admission fee is based on the market
capitalisation of the company on the day of admission.
No admission fee is payable by AIM companies for further issues.

Admission fees

Number of Opening price Market Admission Fee


shares (£) capitalisation (£) (£)
100 50.00 5,000.00 5,870.00

An annual fee of £4,750 is payable by all companies whose equity securities or


certificates representing shares are admitted to trading.
Annual fees are billed in the first week of April for the 12 months commencing 1
April and must be paid within 30 days of the invoice date.
A pro-rata annual fee is payable by new applicants. To calculate the fee, take the
number of calendar days, including the date of admission to trading up to and
including 31 March, divide this number by 365 and multiply the result by the annual
fee.
No pro-rata annual fee is payable by the enlarged entity admitted to AIM following a
reverse takeover under Rule 13 of the AIM Rules for companies.
Annual fees
Date Annual fee (01/04/08 - 31/03/09)

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