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Published on December 16, 2017

Author: kudlapili

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PRESENTATION ON :: PRESENTATION ON : LISTING SECURITIES IN STOCK EXCHANGE Introduction:: Introduction: Stock exchanges are the important ingredient of the capital market.They are the citadel of capital and fortress of finance.They are the theatres of trading in securties. They assist and control the buying and selling of securities. Meaning:: Meaning: Listing of securities means that the securities are admitted for trading on a recognized stock exchange. Definition: According to Husband and Dockeray,”securities or stock exchanges are privately organized markets which are used to facilitate trading in securities.” Characteristics of Listing:: Characteristics of Listing: Agreement Purpose Restriction Investor Protection Listing of Securities:: Listing of Securities: Listing is compulsory for those companies which Intend to offer shares/debentures to the public for subscription by means of issuing a Prospectus. More over, the SEBI insist on listing for granting permission to a new issue by a public limited company. Again, financial institutions do insist on listing for underwriting new issues.Thus,listing becomes an unavoidable one today. The listed shares are generally divided in to two categories namely: Group A shares Group B shares Advantages of Listing:: Advantages of Listing: Facilitating buying and selling securities Ensures Liquidity Offers wide publicity Assures Finance Enables borrowing Protects Investors Drawbacks:: Drawbacks: Leads to Speculation Degrades company’s reputation Discloses vital information to competitors Listing Procedure:: Listing Procedure: A company with requires its securities to be listed must comply with the following formalities . The company concerned must apply in the prescribed form along with the following documents and details: Copies of balance sheet and audited accounts Certified copies of agreements with managerial personnel. Cont…………..: Cont………….. A statement showing dividends or interest in arrears if any. Particulars regarding it’s capital structure. Particular of shares forfeited. Criteria for Listing:: Criteria for Listing: At least 60% of each class of securities issued must be offered to the public for subscription and the minimum issued capital should be 3 crores. The company should be of fair size having broad based capital structure and public interest in its securities. A company having more than 5 crore paid up capital must list its securities on more than one stock exchange. Listing on the regional stock exchange is compulsory. Cont………………: Cont……………… The existing companies must adhere to the ceiling in expenditure of public issues. A certificate to the effect that shares from promoter’s quota are not sold or transferred for a period of 3 years must be submitted. Listing obligations:: Listing obligations: Any change in the company’s directorate or managerial personnel by death , resignation , removal. Any change in the company’s capital structure. Any material change in the general character or nature of the company’s business. Cont……………..: Cont…………….. Any re-issue of forfeited securities or the issue of any other securities held in reserve for future issue. Any intension to make a drawing of listed securities. Additional obligations:: Additional obligations: The company must recommend or declare all dividends at least 5 days before the commencement of the closure of its transfer books. The company must close the transfer books only for the purpose of declaration of dividend or for the issue of rights. The company must grant to shareholders the right of renunciation in all cases of rights issue. New Listing obligations:: New Listing obligations: The companies should have at least 50% of their boards filled in by non-executive directors. If the chairman of the company happens to be a non-executive director , a third of the board should consist of independent directors. If the chairman is an executive director ,the number of independent directors goes up to 50% Listing agreement:: Listing agreement: This listing agreement contains a list of conditions and obligations which the company should strictly observe ,failing which ,the stock exchange may suspend. Many conditions for listing have been laid down with a view to protecting the interest of investors and to ensure that applicants for large blocks of shares are not given undue preference over others. Conclusion: Conclusion Listing is the very basis of stock exchange operations . It is the green signal given to selected securities to get the trading privileges of the stock exchange concerned . Securities become eligible for trading through listing. Bibliography: Bibliography Financial Markets and Institutions by Dr. S. Gurusamy Financial Markets and Services by E. Gordon and K. Natarajan

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