Chittagong Stock Exchange (Direct Listing) Regulations, 2006

In exercise of the power conferred by section 34(1) of the Securities and Exchange Ordinance, 1969 (XVII of 1969), Chittagong Stock Exchange Ltd., with the prior approval of the Securities and Exchange Commission, makes the following Regulations, namely: -

• Short tittle:
  
  (1) These regulations may be called the Chittagong Stock Exchange (Direct Listing) Regulations, 2006.
  (2) These Regulations shall be applicable for direct listing of shares of public limited companies.
• Requirements concerning capital and operation: The concerned company
  
  i) shall have minimum paid up capital of taka  100(one hundred) million;
  ii) shall have no accumulated loss;
  iii shall be in commercial operation for at least immediate last five years
  iv) shall have profit in three years out of the immediate last five completed accounting/financial years with steady growth pattern; and
  v) is regular in holding annual general meeting.
• Listing:
  
  i) The Company shall apply to the stock exchanges with application fee of Tk. 10,000/-(ten thousand) only, and shall simultaneously furnish a copy thereof, along with the copies of documents mentioned under sub regulation (ii), to the Securities and Exchange Commission (SEC).
  ii) The Company shall, among others, submit the following documents along with the application :
  
  (a) Memorandum of Association and Articles of Association
  (b) A brief profile of the company, including brief particulars of existing sponsor-directors of the company;
  

  ______________________

  ¹ The words “fully owned by the government” inserted after the word” companies” as per SEC order no.
   SEC/CMRRCD/2006-161/08 dated December 31, 2009.
  ²The words “stock exchanges” substituted for the words “ Chittagong Stock Exchange (the Exchange)” by
  the SEC Order of SEC/CMRRCD/2006-161/133 dated 4th June 2009

   

                      (c)   Certificate of incorporation and certificate of commencement of business;

                      (d)   Audited financial statements for the last five years;

                      (e)   Members/ shareholders list together with  shareholding position;

                      (f)    Return of allotment(s) filled with the Registrar of Joint Stock Companies and Firms;

                      (g)   Existing material agreements including deed of mortgage (if any);

                      (h)   Status of loan including information concerning loan default, if any, of the company;

                      (i)    VAT and Tax identification numbers;

                      (j)    Due diligence certificate from the directors as per format prescribed by the Exchange;

                      (k)   No objection certificate from the lending bank(s) /financial institutions of the company, if any, where applicable;

                     (l)    Undertaking in the prescribed form as laid down in the listing regulations of the Exchange to the effect that the company shall comply with the securities laws including requirements of the said  listing regulations upon listing with the Exchange;

                      (m)    Relevant resolution(s) of the shareholders in the general meeting of the company and the Board’s resolution, if so authorised, for the purpose of listing with the Exchange;

                     (n)   Credit rating report issued by the credit rating company registered with the Commission with minimum investment grade of “BBB”;

                      (o)    Information Document as per format prescribed by the Exchange;

                      (p)    The shareholders resolution in respect of disposal of shares in accordance with the regulation 5.

          iii)    Upon receipt of the application, the Exchange shall examine and inform the company within 15 (fifteen) days from the receipt of the application, with a  copy to the Commission , to remove the deficiencies, if any, within 30 (thirty) days from the date of receipt from the Exchange.

         iv)  The Exchange shall furnish to the Commission the copies of all information and documents received from the company pursuant to the

  Exchange’s letter mentioned under the sub-regulation (iii) within the following working day of receipt.

         v)    After fulfillment of all requirements by the company, the Exchange shall list the company’s shares within three weeks from the date of publication of the Information Document, as mentioned in regulation 4, under intimation to the Commission, provided there is no contrary opinion of the Commission in this respect.

        vi)   In case of failure to fulfil the requirements by the company, the Exchange shall reject the application for listing showing reasons thereof, under intimation to the Commission, within 60(sixty) days from the date of application.

• The company shall publish an Information Document in at least two widely circulated national dailies minimum 7 (seven) days before commercial trade upon listing by the Exchange along with an electronic copy for posting in the web page of the Exchange.
• Disposal of shares: (i) Existing shareholders of the company shall sell their shares through the Exchange upon listing.
  
  (ii) No existing shareholder of the company shall sell more than 50% of his existing shareholdings until the company holds the annual general meeting after completion of one full accounting year of the company upon listing with the Exchange :

            ¹Provided that the existing shareholders shall offer for sell at least 25% of the shareholdings in the company within 30(thirty) trading days from the date of commencing the normal trading i.e. after the price of the listed share is discovered and fixed following the book building method as prescribed by SEC through Securities and Exchange Commission (Public Issue) Rules, 2006, to the extent those are applicable or relevant in these respect.

_____________________

¹ The proviso of regulation 5 “Provided that the existing shareholders shall offer for sell at least 10% of the

shareholding in the company within 30(thirty) working days from the date of listing” is substituted by new

proviso by the  SEC Order of SEC/CMRRCD/2006-161/133 dated 4th June 2009.

¹5. A. Allocation /Distribution:

10% (ten percent) of the said 25% shareholdings shall be allocated/distributed to the eligible institutional bidders following the procedures prescribed for determining price under the book building method, balance quantity shall be available for general investors through normal trading system of the stock exchanges.

² 5.B.  Lock-in:

There shall be lock-in of 15(fifteen) trading days from the first trading day on the security issued to the eligible institutional investors through book building method.

³ 5.C. Others:

     (i)   The existing shareholders (i.e. sponsors/directors) shall be restricted from buying the company’s share until complete disposal of the targeted 25% shareholdings.

     (ii)  The selling broker of the existing shareholders shall disclose through the stock exchanges the total number of shares sold everyday along with the cumulative quantity sold and the quantity of unsold shares until completion of sale of the said targeted 25% shareholdings.”

• Trading and settlement:
  
  (i) Trading of the shares listed under these Regulations shall be in dematerialized form.
  (ii) Existing provisions of trading and settlement of transactions of the Exchange shall be applicable in respect of the shares listed under these regulations.
  (iii) Normal trade for general investors will begin two-day after transfer of the shares allocated to the eligible institutional bidders is completed.
• SEC decision shall be final on certain matter:-
  Notwithstanding anything contained in these Regulations, in the event of any confusion or difference of opinion on any matter whatsoever, the decision of SEC shall be final and binding on all concerned.

 

MKM Mohiuddin

President

Chittagong Stock Exchange Limited

______________________ 

¹-5   Inserted vide SEC Order of SEC/CMRRCD/2006-161/133 dated 4th June 2009