NCRDs Sterling Institute of Management Studies

Financial Market & Institution.

Topic- Listing of Securities. Submitted to: Prof. Aradhana Tiwari

 Submitted by: Namrata koli Sunil Metkari Audut Saudagar Bharat Prajapati Asha Dhamdhere Prathmesh Pathak

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Listing of Securities
Admission of securities of an issuer to buying and selling rights (dealings) on a stock exchange by way of a formal agreement.
The main aim of admission to dealings on the exchange is to give liquidity and also marketability to securities, as also to give a mechanism for efficient control and supervision of trading.

Cont.
The securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc.
A company can seek listing if at least 10 per cent of the securities, subject to a minimum of 20 lakh securities, have been offered to public for subscription.

Objective of Listing
Three Main Objective of listing
Provide liquidity to shares Mobilize savings for economic development

protect interest of investors by ensuring full disclosures.

Benefits of Listing of Securities

1. A premier market place :i) Insures that impact cost is lower on stock exchange which reduces cost of trading to investors II) It ensures consistency and transparency.
2. Visibility :i) Trading system provides unparallel nature of trade and post trade information. ii) It provides information of best five buy and sell orders.

3.Unprecedent reach:i) Stock exchange provides trading platform. ii) Number of investors can avail of trading facilities.
4. Value addition:i)A listing can also be anticipated to attach importance to companys employee shre ownership scheme.

5. Increasing capital:i) It makes available acsess to collction of institutional and retail investors and to the capital market.
6.Price detection:i) A listing facilitates companies to ascertain a price for their shares. 7. Low cost capital:i) The primary gain of raising capital from the market. ii) It avoids a number of intermediation expenses apparent in the other forms of capital raising.

Limitations of Listing
1. Once the share are listed the company subject

themselves to various regulatory measures of stock exchange SEBI. They have to disclose vital information to the stock exchange. 2. The company has to send notice for annual general meeting to a large number of shareholders, resulting in expenditure.

Requirement of listing of securities

Minimum Listing Requirements for new companies:companies have been classified as a) Large cap companies b) Small cap companies
1.

2. Listing of securities in stock exchange

Cont
3. Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange
4. Approval of draft prospectus 5. Submission of Letter of Application:(As per sec 73)

Allotment of Securities
Required to allot securities in 30 days from the date of closure of

subsciption Approach to regional stock exchange failing will results in paying of interest @ 15% to the investors

Trading Permission
Trading formalities should be completed in 7 working days after

finalization of allotment Adhere to time limit of dispatching allotment letters and certificates In case of denied in listing company may appeal to SEBI (section 22) of SECURITIES CONTRACT ACT,1956

Requirement of 1% Security
The companies making public/rights issues are required to

deposit 1% of issue amount with the Regional Stock Exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates, non-payment of commission to underwriters, brokers, etc.

Payment of Listing Fees

SCHEDULE OF LISTING FEES FOR THE YEAR 2006-2007 Sr. No. 1 Particulars Initial Listing Fees Amount (Rs.) 20,000

2
Annual Listing Fees (i) Companies with paid-up capital* upto Rs. 5 crores (ii) AboveRs. 5 crores and upto Rs. 10 crores (iii) Above Rs. 10 crores and upto Rs. 20 crores 30,000 3 Companies which have a paid-up capital* of more than Rs. 20 crores will pay additional fee of Rs. 750/- for every increase of Rs. 1 crores or part thereof. 4 In case of debenture capital (not convertible into equity shares) of companies, the fees will be charged @ 25% of the fees payable as per the above mentioned scales. *includes equity shares, preference shares, fully convertible debentures, partly convertible debenture capital and any other security which will be converted into equity shares. Kindly Note the last date for payment of listing fee for the year 2006-2007 is April 30, 2006. Failure to pay the listing fee(for the equity and/or debt segment) before the due date i.e. April 30, 2006 will attract imposition of interest @ 12% 15,000 10,000

Compliance with Listing Agreement

Under Listing agreement company undertakes following actions To provide facilities for prompt transfer, registration, sub-division and consolidation of securities To give proper notice of closure of transfer books and record dates To furnish financial results on a quarterly basis Listing Department of the Exchange can take penal action against the defaulting companies.

Cash Management Services (CMS) - Collection of Listing Fees

For simplifying the system of payment of listing fees, the

Exchange has entered into an arrangement with HDFC Bank Cheque should be drawn in favour of Bombay Stock Exchange Limited To be mention in depository slip with the financial year Slips will have to be in quadruplicate so as to acknowledge the depositor

Cash Management Services (CMS) - Collection of Listing Fees

S.No 1. 2. HEAD Client Name Client Code INFORMATION TO BE PROVIDED Bombay Stock Exchange Limited BSELIST

3.
4.

Cheque No.
Date

mention the cheque No & date

date on which payment is being deposited with the bank.

state the name of the company and the company code No.The last digits
5. Drawer mentioned in the Ref. No. on the Bill is the company code No.e.g If the Ref. No in the Bill is mentioned as : Listing/Alf-Bill/2004-2005/4488, then the code No of that company is 4488 6. 7. 8. 9. Drawee Bank Drawn on Location Pickup Location No. of Insts state the bank on which cheque is drawn Mention the location of the drawee bank. Not applicable Not applicable

Procedure for Listing of Securities

Listing is an admission of an securities to dealing on an stock exchange. Listing Procedure:

An Issuer has to take various steps prior to making an application for listing its securities on the Stock Exchange.

Contd.
Approval of Articles of Association.

- Rule 19(2)(a) - unclaimed dividend - common form - share certificate.

Approval of draft prospectus.

- SEBI acknowledge letter

Submission of Application

Contd
Payment of listing fees and deposits of securities money.
Supporting documents required as follows:

Clauses of Articles of Association. Application Letter for Listing. Listing Application providing pre-issue details of securities. Listing Application providing post-issue details of securities. Checklist for supporting documents ( as applicable to the issuer) Schedule of Distribution

Compliance of Listing Agreement and Laws

Listing fees
Companies which have a paid up share,

bond / debenture /debt capital, etc. of more than ` 500 crores will have to pay min. fees of ` 3,75,000 and an additional listing fees of ` 2,500 for every increase of ` 5 crores or part thereof in the paid up share, bond / debenture/debt capital, etc.

Growth rate of the companies

Two categories, namely listed and

permitted to trade categories of securities (ES, PS & Debn.)are available for trading in the CM segment. At the end of March 2010, 1,470 companies were listed, 37 companies were permitted for trading and 1,359 were available for trading. These securities had a market capitalization of ` 6,009,173crore .The growth of companies listed on the CM segment is presented in table.

De-listing of Securities
The SE may de-list companies which have

been suspended for a min.Period of 6m for non-compliance with the listing agreement. To give adequate and wide public notice through newspapers and also give a show cause notice to a company. Provide a time period of 15 days within which representation may be made to the exchange by any person who may be aggrieved by the proposed delisting.

Contd..

After consideration of the representation

received from the aggrieved persons, delist the securities of such companies. To ensure that adequate and public notice is given & ensure disclosure in all such notices of the paying fair value of such securities

Name of the Company Date of Delisting 2009-2010

The Madras Aluminum Company Limited*

19-Jun-09 Lotte India Corporation Limited* 31-Jul09 Matrix Laboratories Limited* 21-Aug-09 Pearl Global Limited* 21-Aug-09 SI Group - India Limited* 23-Sep-09 PHIL Corporation Limited^ 9-Feb-10