In order to attract investments into the company through shares, they must appear on the market. Listing is a procedure during which the registration and placement of securities within a particular exchange takes place.
Terms related to the placement of shares
Listing - this is actions to place the circulation of securities through inclusion in quotation lists or circulation within the stock exchange in accordance with the procedure and norms approved by the organizer of securities trading and not contradicting the relevant legislation. In the Russian Federation, the placement standards are described in the Decree of the Federal Commission for the Securities Market No. 23 dated December 9, 96 “On the Approval of the Temporary Regulation on the Requirements for Trade Organizers on the RZB and the Temporary Regulation on the Licensing of Activities on the RZB”.
Delisting is actions and measures aimed at eliminating stocks and bonds from circulation on the trading floors of stock exchanges or removing them from the quotation list. This procedure is often approved by the auction organizer in accordance with accepted standards.
Quotation list - a list of securities that are in circulation on the stock and bond markets.
Listing Procedure
To start the listing procedure, an interested person with the right to issue securities is given a written statement about the desire to place securities within a specific platform, as well as an appropriate package of documents.
Listing is a procedure in which placement can take place using a quotation sheet of the first or second levels.
Placement of shares or bonds in a quotation sheet of the first level is possible only at the request of the issuer (the person who initially places the shares of his company).
Listing rules allow you to place shares and bonds in the second-level quotation list for both issuers and various participants in the trading process on a particular exchange.
It is believed that the securities are considered to have passed the exchange listing procedure after the completion of the examination and their inclusion in the quotation sheet, about which the applicant is notified in writing in the time frame established by the rules of the trading platform.
The exchange examination is held within the framework of the quotation committee, which is formed from representatives of the organizer of the trading platform, independent experts and participants in the trading process.
To complete the listing procedure, the applicant provides the following documents:
- financial statements for the current year;
- financial statements for previous periods;
- information on the financial condition of the assets and income of the company;
- documents confirming the right to place securities.
The life of the issuer must be at least two years for a sheet of the second level and three years for the first. The statutory fund must be at least 6 million euros or 10 million euros, depending on the level of the quotation sheet.
Listing Rules
To allow securities to be circulated, as part of securities market they must comply with the placement rules. Namely:
- Securities must be officially registered and issued;
- the issue report and the main characteristics of the issue should be issued in the form of a report that meets all regulatory laws;
- free conversion of securities should be ensured;
- in order to maintain circulation within the quotation list, a minimum turnover of shares and bonds must be ensured.
Securities delisting
The organizer of the trading floor may exclude securities from quotation sheets.For this, the rules of circulation prescribe the reasons and circumstances under which delisting occurs. Of the common causes, the following should be highlighted:
- application for exclusion from the quotation sheet;
- recognition by the regulatory body of the issue as failed;
- the court decision on the withdrawal of the issue from the quotation;
- liquidation of the issuing company;
- the term for admission or circulation of securities has expired;
- non-compliance with the quotation sheet due to the issuer's failure to fulfill its obligations to the exchange;
- violation of placement requirements by the issuer's financial performance indicators.
Stock exchange listing is an important process that allows you to attract additional investment in the foreign market and refinance the company.
