IPOs & Exchange Listing
Regulatory Requirements & Compliance
Presented at:
Presented by:
Mr. Salman Ali Bokhari
Head of Corporate Finance
Pakistan IPO Summit
April 29, 2013
Regulatory Framework
» Ordinances/Acts
» SECP-Securities and Exchange Ordinance
» SECP-Listed Companies (Substantial Acquisition of Voting Shares and
Take-overs) Ordinance
» SECP Rules
» SECP-Code of Corporate Governance
» SECP-Companies (Buy-Back of Shares) Rules
» SECP-Companies (Issue of Capital) Rules
» SECP Guidelines
» Issue of Commercial Paper
» Issue of TFCs
» Prohibition of Insider Trading
» Exchange
» Provisionally Trading Company
» Listing Regulations
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PRE-LISTING
MATTERS & REQUIREMENTS
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Listing Eligibility
LSE’s Listing Regulations
» Public Limited Company
» Minimum Paid-up Capital:
Rs. 200 Million
» Company’s Equity has NOT
been eroded by more than
40%
P
P
P
Issue offered to public must be subscribed by a minimum of 500 Applicants
Listing Eligibility
LSE’s Listing Regulations
» NOT Associate of a Listed Company in
default of Listing Regulations
» NOT Subsidiary of a Listed Company in
default of Listing Regulations
» Promoters/Sponsors/Controlling directors
are NOT Promoters/Sponsors/Controlling
directors of a company in default of Listing
Regulations
» CEO had not,been a CEO of a company in
default of Listing Regulations
P
P
P
P
Offer Allocation
» For Initial Public Offers: Rs. 100 million or 25% of the total Paidup Capital whichever is higher
» For Offer by Existing Shareholders: Rs. 100 million or 25% of
the total Paid-up Capital whichever is lower
» Allocation of Offered Shares
» Upto 20% may be allocated to overseas Pakistanis
» Upto 5% may be allocated to employees of the Company
» The allocation of shares to:
» Sponsors in excess of 25%; and
» Allocation of shares, under Pre-IPO placement including employees of the
companies/group companies etc.,
shall not be saleable for a period of 6 months from the date of public
subscription.
Listing Process
Application for
Listing
Complete Documents
Received by Exchange
along with Prospectus
Checked by
Exchange
Application for
Approval of
Prospectus from
SECP
Application for
Trading Symbol to
NCCPL
Application for Prospectus
Publication
+
Subscription Date
8
Approval by
Company Affairs
Committee
Listing Process(Cont’d)
Application for Prospectus
Publication
+
Subscription Date
Publication
of
Prospectus
IPO
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Checked
by
Exchange
Approval
Provisional Listing
in case of Public Offer of Rs. 150 Million
or above
Listing Process(Cont’d)
Underwritten by Underwriters if
Under-subscribed
IPO
Results
Notification to
Exchange
Balloting in case of Over Subscription
Application for NOC and release of funds along with
Auditors’ Certificate in case of under-Subscription
Dispatch of Physical
and CDC Shares
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Newspapers
FORMAL LISTING
ON EXCHANGE
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Live in CDC
Approval
On-Going Compliance
» Dividends: Information to be sent to exchange prior to
release
» Communication of price sensitive information
» Sending copies of annual reports 21 days before meeting of
shareholders
» Sending copies of quarterly accounts
» Annual meeting within 4 months of closing of annual
financial year
» Furnish certified copies of minutes of AGM and EOGM in
60 days
» Compliance of Code of Corporate Governance
» Quality of Audit & Appointment of Auditors
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Suspension and Defaulters’ Counter
» A listed company may be placed in Defaulters Segment, suspended or delisted
for any of the following reasons:» (a) if its securities are quoted below 50 percent of face value for a continuous period of
three years.
» (b) if from three years of the date of formal listing, it has not started commercial
production in the case of a manufacturing company or has not commenced business in
the case of any other company.
» (c) if it has failed to hold its annual general meeting for a continuous period of two years.
» (d) if it has gone into liquidation either voluntarily or under court order;
» (e) if it has failed to pay the annual listing fees as prescribed in these regulations payable
to the Exchange for a period of 2 years or penalty imposed under these regulations or any
other dues payable to the Exchange;
» (f) if it has failed to comply with the requirements of any of the listing regulations;
» (g) if the company for any reason whatsoever refuses to join the CDS after its securities
have been declared eligible securities by the CDC.
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Delisting
» Voluntary Delisting: Any company intending to seek
voluntary de-listing from the Exchange shall intimate to the
Exchange, immediately, of the intention. Minimum purchase
price proposed by the sponsors will be the highest of the
benchmark price based on any of the following:
a. Market Price
b. Average Market Price (Annualized)
c. Intrinsic value per share (estimated net realizable value of assets of
the company)
d. Earnings Multiplier approach (for profitable companies)
e. The maximum price at which the Sponsors had purchased these
shares from the open market in the preceding one year.
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Listing Fee Structure
» Initial Fee: 0.1% of PUC maximum of 2.5 Million
» Additional Fee: 0.1% of PUC or 0.4% of actual capital
» Annual Fee:
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