How to list securities in RSE - tradecareer

                        How to list securities in RSE

                                             Listing of Securities


How to list securities in RSE :-

Listing of securities with stock exchange is a matter of great importance for companies and investors as it provides the liquidity to the securities in the market. The prices at which the securities are traded in the stock exchange are published in the News Papers and other online plateforms.

A public company wishes to get its securities listed on a RSE, shall apply to the stock exchange for listing of securities along with the following documents and particulars: -

a) MOA and AOA and a copy of debenture trust deed in case of issue of debenture.

b) Copies of prospectus or statements in lieu of prospectus issued by the company at any time.

c) Copies of offers for sale and circulars or advertisements offering any securities for subscription or sale during the last 5 years.

d) Copies of balance sheets and audited accounts for the last 5 years, or in the case of new companies, for such shorter period for which accounts have been made up.

                                                                              


e) A statement showing:

i. Dividends and cash bonuses, if any, paid during the last 10 years (or such shorter period as the company has been in existence, whether as a private or public company);

ii. Dividends or interest in arrears, if any.


f) Certified copies of agreements or arrangements with or between:

1. Vendors and/or promoters;

2. Underwriters and sub-underwriters; 

3. Brokers and sub-brokers.


g) Certified copy of every letter, report, balance sheet, valuation contract, court order or other document, part of which is reproduced or referred to in any prospectus, offer for sale, circular or advertisement offering securities for subscription or sale, during the last five years.


h) A statement containing particulars of the dates of, and parties to all material contracts, agreements (including agreements for technical advice and collaboration), concessions and similar other documents (except those entered into in the ordinary course of business carried on or intended to be carried on by the company) together with a brief description of the terms, subject-matter and general nature of the documents.

                                                                     


i) A brief history of the company since its incorporation giving details of its activities including any reorganization, reconstruction or amalgamation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings.


Types of listinng of Securities :-

                       1. =>Initial Listing (at the time of IPO)

                       2. =>Public Issue listing (at the time of FPO)

                       3. =>Rights Issue Listing (To shareholders)

                       4. =>Bonus issue listing (To shareholders)

                       5. =>Listing after Re-construction (after merger or amalgamation)


=> Initial Listing: If the shares or securities are to be listed for the 1st time by a company on a stock exchange is called initial listing.


=> Listing for Public Issue: When a company whose shares are listed on a SE comesout with a public issue of securities, it has to list such issue with the SE.


=> Listing for Rights Issue: When companies whose securities are listed on the SE issue securities to existing shareholders on rights basis, it has to list such rights issues on the concerned SE.


=> Listing of Bonus Shares: Shares issued as a result of capitalization of profit throughbonus issue shall list such issues also on the concerned SE.


=> Listing for Merger or Amalgamation: When new shares are issued by an amalgamated company to the shareholders of the amalgamating company, such shares are also required to be listed on the concerned SE.

                                                                      


Multiple Listing

A company with a paid-up capital of over Rs. 5 crores should list its securities or have its securities permitted for trading, on at least one SE having nationwide Trading Terminals.

Multiple listing provides arbitrage opportunities to the investors, whereby they can make profit based on the difference in the prices prevailing in the said exchanges.


Benefits of Listing :-

The following benefits are available when securities are listed by a company in the SE

(i) Public image of the company is enhanced.

(ii) The liquidity of the security is ensured making it easy to buy and sell the securities in the SE.

(iii) Tax concessions are made available both to the investors and the companies,

(iv) Listing procedure compels company management to disclose important information to the investors enabling them to make crucial decisions with regard to keeping or disposing of such securities.

(v) Listed companies command better support such as loans & investments from Banks & FIs.


Suspension or Withdrawal of admission to dealings in securities on stock exchange


A RSE may suspend or withdraw admissions to dealing in securities of a company. Reason for Withdrawal

=> Breach/Non-compliance of conditions

=> Any other reason, to be recorded in writing


Important Highlights


=> Before such suspension/withdrawal company should be given a reasonable opportunity of being heard and show cause notice.

=> If the period of suspension exceeds 3 months’ company may prefer an appeal to SAT.

=> SAT after giving opportunity of being heard can set aside, confirm or vary the decision of Stock Exchange.

=> The order of SAT shall be a binding on Stock Exchange.


Delisting of securities on stock exchange

A RSE may delist any securities listed on it

Grounds of Delisting


=> The company has incurred losses during the preceding 3 consecutive years and it has negative networth.


=> Trading in the securities of the company has remained suspended for a period of more than 6 months.


=> Securities of the company have remained infrequently traded during the preceding 3 years.


=> The company or any of its promoters or any of its directors has been convicted under this Act, SEBI Act and Depositories Act.


=> Company is unable to maintain the minimum public shareholding.

Before delisting company should be given a reasonable opportunity of being heard and show cause notice.


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