Listing Securities

Listing of Securities Chapter Objectives ? To understand the conception of list of securities ? To know the criteria for itemization shargons ? To regulate the listing procedure ? To understand the concept of delisting Concept of Listing of Securities ?It doer the admission of shares of a public limited caller on the farm animal exchange for the purpose of trading. ?A political party intending to have its shares listed on the fund exchange has to write an application to one or more recognise take exchanges. ?A federation becomes qualified to list its shares after getting the prior permission from the declivity exchange. Some of the advantages of listing of securities are ? fluidness Best prices Wide publicity ? Some disadvantages of listing of securities are ? Subjected to non-homogeneous regulatory measures ? Expensive exercise Criteria for Listing A company that wants its securities to be listed in the bloodline exchange has to do certain negligible requirements , much(prenominal) as ? Minimum disobliged dandy A company should have minimum issued capital of Rs. 3 crores and the minimum public offer must(prenominal)(prenominal) be of Rs. 75 lakhs. ?Listing on multiple exchanges It is inherent for a company to get listed in the pedigree exchange if its paid up capital is above Rs. crores. ?Number of shareholders A company must have a minimum ten shareholders. ?Articles of Association The Articles of Association must be nimble in line with the sound corporate practice of a company. ? advert A company during the subscription period must not advertise by thanking the public for their overwhelming response. ?Applying mode A company must issue a prospectus, which provides tuition on how the investor should apply for the shares. ?Public offer size A company, in the first page of the prospectus must conjure the size of the public offer and the value of shares. Listing ProcedureTo get the listing permission from the stock exchange, a compa ny has to undertake the following step ?Preliminary discussion A company must have a detailed discussion with the authorities of the stock exchange in found to acquire complete knowledge about the various formalities to be completed for listing of securities. ?Articles of Association approval A company must fulfil the following requirements in order to get the Articles of Association sanctioned by the stock exchange authorities ?It must use a common form of transfer. ?In case of distributing dividends, it must comply with prick 205-A f the Companies Act. ?The free dealing of shares must not be dependant by any provision. ?Draft prospectus approval It is very essential for a company to get its draft prospectus approved from the stock exchange authorities. A prospectus must contain all the information required by the stock exchange. Listing Application ?A company that wants to offer its shares through the prospectus must institutionalise an application to the stock exchange. ?A company has to file following certificates alongwith the prospectus ?Three qualified copies of the memorandum and articles of association, and debenture trust deed. A copy of every report, counterbalance sheet, valuation, court order, etc. as specified in the prospectus. ?Certified copies of underwriting, brokerage and sales managers agreement. ?Copies of agreements with the financial institutions. Listing Fee ?It is a fee supercharged by the stock exchange from the company for permitting the companys securities to be traded in the exchange. ?It varies from major stock exchanges to regional stock exchanges. ?It also varies overdue to the equity base of the company. Listing of Right Shares A company has to fulfil certain formalities in case of isting right shares in the stock exchange, such as ? ? ? ? ? A company must inform the stock exchange about the date of meeting with the Board of Directors for considering the proposal of listing right shares. A company must obtain the cons ent of the shareholders by passing on a special resolution. A company must file a earn of offer that provides the financial information about the current market price of the share. A company must file a letter of offer within six weeks. A company must file a specimen copy of the offer letter to the stock exchange. Delisting It is the removal of a companys shares from the listing in the stock exchange. ? Delisting can be of two types ? Compulsory The causes for compulsory delisting are as follows ? Non-payment of the listing fee ? Non-redressal of grievances ? Unfair trade practices carried on by the managers ? Voluntary The causes for voluntary delisting are as follows ? ? ? Business suspended Mergers and takeovers diminutive capital base Chapter Summary By now, you should have ? Understood the concept of listing of securities ? Learnt the procedure of listing of securities ? Understood the concept of delisting