Listing of Securities: Conditions and Essentials

Edited & Compiled for General Reading – Last Updated on May 19, 2015

Listing of Securities means formal admission of a security to the trading platform of the Exchange. It provides liquidity to investors without compromising the need of the issuer for capital and ensures effective monitoring of conduct of the issuer and trading of the securities in the interest of investors.

A company, desirous of listing its securities on the Exchange, shall be required to file an application, in the prescribed form, with the Exchange before issue of Prospectus by the company, where the securities are issued by way of a prospectus or before issue of ‘Offer for Sale’, where the securities are issued by way of an offer for sale. The company shall be responsible to follow all the requirements specified in the Companies Act, the listing norms issued by SEBI from time to time and such other conditions, requirements and norms that may be in force from time to time and included hereafter in these Bye-laws and Regulations to make the security eligible to be listed and for continuous listing on the Exchange.

Listing Criteria

The Exchanges has laid down criteria for listing of new issues by companies through IPOs, companies listed on other exchanges, etc. in conformity with the Securities Contracts (Regulation) Rules, 1957, SEBI Guidelines and other relevant guidelines/acts. The criteria include minimum paid-up capital and market capitalisation, company/ promoter’s track record, etc. The issuers of securities are required to adhere to provisions of the Securities Contracts (Regulation) Act, 1956, the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992, and the rules, circulars, notifications, guidelines, etc. prescribed there under.

Conditions & Requirements

  • The Governing Board or Managing Director or Relevant Authority may not grant admission to dealings on the Exchange to a security of an issuer unless the issuer complies with the listing conditions, requirements and norms, under the SCRA, SCRR, the Companies Act, the Rules, Bye-laws and Regulations of the Exchange and the norms, as may be prescribed by the Exchange and/or SEBI from time to time.
  • The Governing Board or Managing Director or Relevant Authority shall ensure that no listing or trading permission is granted unless the issuer complies with all the conditions, requirements or norms, as may be provided in the relevant Regulations from time to time, including dispatch of physical share certificates to, and/or credit of demat shares to the accounts of all the security-holders, maintained with the depositories.
  • Where the Exchange is the stock exchange with whose consultation the basis of allotment is decided, the Governing Board or Managing Director or Relevant Authority of the said stock exchange shall intimate the depositories about approval granted for admission to dealings on the Exchange for any security.
  • The company shall execute a Listing Agreement, in the prescribed form with the Exchange, prior to approval of the listing application of the company. Any addition or amendment to the provisions of the Listing Agreement, as may be prescribed by SEBI and/or the Exchange shall become applicable to the company as if such addition or amendment was part of the Listing Agreement.
  • In the case of a new issue or further issue by any issuer the Governing Board or Managing Director or Relevant Authority may grant permission for trading in any security at the Exchange on the same day as on all other stock exchanges where such security admitted to dealings is granted permission for trading.

References:

  • Listing of Securities: Available at http://www.nse-india.com/content/us/fact2009_sec3.pdf
  • Model Bye Laws, Chapter 4, Listing of Securities: Available at http://www.sebi.gov.in/cms/sebi_data/commondocs/ch4_p.pdf

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