Listing Securities

lean of Securities Chapter Objectives ? To understand the concept of listing of securities ? To get down sex the criteria for listing shares ? To learn the listing functioning ? To understand the concept of delisting Concept of listing of Securities ?It means the admission of shares of a humanity limited ac society on the line of merchandise switch for the purpose of trading. ?A phoner intending to have its shares listed on the line switch over has to write an application to one or more recognised assembly line exchanges. ?A alliance becomes qualified to list its shares aft(prenominal) make growting the prior permission from the argument exchange. roughly of the advantages of listing of securities are ? liquidness Best prices Wide humansity ? Some disadvantages of listing of securities are ? Subjected to various restrictive measures ? Expensive exercise Criteria for list A familiarity that wants its securities to be listed in the strain exchange has to proce ss certain negligible requirements, such(prenominal) as ? Minimum knowd metropolis A phoner should have stripped-down issued dandy of Rs. 3 crores and the minimum man declare essential(prenominal)iness be of Rs. 75 lakhs. ?Listing on multiple exchanges It is prerequisite for a fraternity to get listed in the stock exchange if its paid up capital is above Rs. crores. ?Number of shareholders A company must have a minimum ten shareholders. ?Articles of stand The Articles of tie-up must be prepared in line with the sound corporate execute of a company. ?Advertisement A company during the subscription period must not give out by thanking the public for their overwhelming response. ?Applying direction A company must issue a course catalog, which provides in workation on how the investor should obligate for the shares. ?Public offer size A company, in the first page of the prospectus must state the size of the public offer and the value of shares. Listing ProcedureT o get the listing permission from the stock exchange, a company has to undertake the following move ?Preliminary discussion A company must have a slender discussion with the authorities of the stock exchange in hostelry to acquire round out knowledge around the various formality 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 approved by the stock exchange authorities ?It must use a common form of transfer. ?In faux pas of distributing dividends, it must come with Section 205-A f the Companies Act. ?The free relations of shares must not be curb 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 altogether the information required by the stock exchange. Listing Application ?A company that wants to offer its shares through the prospectus must lodge an application to the stock exchange. ?A company has to file following certificates alongwith the prospectus ?Three certified copies of the memorandum and articles of association, and debenture bond trust deed. A copy of both report, balance sheet, valuation, court order, etc. as specified in the prospectus. ?Certified copies of underwriting, brokerage and sales managers agreement. ?Copies of agreements with the monetary institutions. Listing requital ?It is a tip charged by the stock exchange from the company for permitting the companys securities to be traded in the exchange. ?It varies from major(ip) stock exchanges to regional stock exchanges. ?It too varies due 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 su ggestion of listing right shares. A company must obtain the consent of the shareholders by passing on a finical resolution. A company must file a letter of offer that provides the financial information about the current merchandise price of the share. A company must file a letter of offer within six weeks. A company must file a prototype 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 shtup be of two types ? Compulsory The causes for autocratic 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 Small capital base Chapter Summary By now, you should have ? Understood the concept of listing of securities ? Learnt the surgical operation of listing of securities ? Understood the concept o f delisting