Listing Securities

inclination of Securities Chapter Objectives ? To understand the fantasy of list of securities ? To know the criteria for listing shares ? To learn the listing procedure ? To understand the concept of delisting Concept of inclination of Securities ?It means the admission of shares of a habitual check outrank on the bear commutation for the purpose of trading. ?A follow intending to have its shares listed on the stock exchange has to write an application to wholeness or more recognised stock exchanges. ?A companion becomes measure up to list its shares after getting the prior permission from the stock exchange. nearly of the advantages of listing of securities are ? Liquidity ?? Best prices ?? Wide publicity ? nearly disadvantages of listing of securities are ? Subjected to various regulatory measures ? Expensive exercise Criteria for Listing A come with that wants its securities to be listed in the stock exchange has to complete certain minimum requirements, such as ? Minimum issued capital A corporation should have minimum issued capital of Rs. 3 crores and the minimum public hug drug essentialiness be of Rs. 75 lakhs. ?Listing on six-fold exchanges It is essential for a union to get listed in the stock exchange if its paid up capital is above Rs. crores. ?Number of shareholders A phoner moldiness(prenominal)iness have a minimum ten shareholders. ?Articles of friendship The Articles of Association must be prepared in line with the sound collective practice of a company. ?Advertisement 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 information on how the investor should take to for the shares. ?Public offer size A company, in the first varlet of the prospectus must state the size of the public offer and the tax of shares. Listing ProcedureTo get the listing permission from the stock exchange, a comp any has to undertake the interest steps ?Preliminary discussion A company must have a detailed discussion with the governance of the stock exchange in order to acquire complete knowledge more or less the various formalities to be completed for listing of securities. ?Articles of Association adulation 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 contingency of distributing dividends, it must comply with Section 205-A f the Companies Act. ?The free dealing of shares must not be restricted by any provision. ?Draft prospectus approval It is very essential for a company to get its rough drawing 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 file an application to the stock e xchange. ?A company has to file following certificates alongwith the prospectus ?Three certified copies of the memorandum and articles of association, and debenture trust deed. A copy of every report, balance sheet, valuation, court order, etc. as specify in the prospectus. ?Certified copies of underwriting, brokerage and sales managers agreement. ?Copies of agreements with the financial institutions. Listing tilt ?It is a fee charged 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 due to the equity base of the company. Listing of right on Shares A company has to fulfil certain formalities in look of isting right shares in the stock exchange, such as ? ? ? ? ? A company must inform the stock exchange about the date of get together with the Board of Directors for considering the proposal of listing right shares. A company must obtain the consent of the shareholders by passing on a supererogatory resolution. A company must file a letter of offer that provides the financial information about the current market price of the share. A company must file a letter of offer in spite of appearance 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 can be of devil types ? Compulsory The causes for compulsory delisting are as follows ? Non-payment of the listing fee ? Non-redressal of grievances ? unsportsmanlike 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 ? silent the concept of listing of securities ? Learnt the procedure of listing of securities ? Understood the concept of delisting