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What do you mean by Listing of Securities in Stock Exchange?

Narendra Kumar

| Updated: Feb 04, 2018 | Category: SEBI Registration

Listing of Securities in Stock Exchange

Listing means the admission of securities of a company to trading on a stock exchange. Listing is not compulsory under the Companies Act 2013/1956. It becomes necessary when a Public Limited Company wants to issue shares or debentures to the public. When securities are listed on a stock exchange, the company has to comply with the requirements of the exchange.

The listing provides an exclusive privilege to securities on the stock exchange. Only listed shares are quoted on the stock exchange. Stock exchange provides transparency in transactions of listed securities and equality and competitive conditions. Listing is beneficial for the company, to the investor, and to the public at large.

Objectives of Listing

  • To provide liquidity to securities
  • To provide a mechanism for effective control and supervision of trading
  • To mobilize savings for economic development
  • To provide free negotiability to stocks.
  • Ability to raise further capital

Eligibility Criteria

1. Applicant Company, desirous of getting listed should comply with the required Eligibility criteria as prescribed by the stock exchange. Minimum Listing Requirements for New Companies-

  • The minimum post-issue paid-up capital of the company shall be INR. 10 Crore for IPOs and INR.3 crore for FPOs, and
  • The minimum issue size shall be INR. 10 crore, and
  • The minimum market capitalization of the Company shall be INR. 25 crore ;
  • Default in compliance with the listing agreement shall not be done by applicant, promoters and /or group companies
  • In addition to the above eligibility criteria, certain conditions prescribed under SEBI ICDR (Issue of Capital & Disclosure Requirements) Regulations, 2009.
  • The issuer shall comply with all the applicable guidance, regulations interlaid from
  • Securities Contracts (Regulations) Act 1956
  • Securities Contracts (Regulation) Rules 1957
  • Securities and Exchange Board of India Act 1992[1]
  • And any other circular, clarifications, guidelines issued by the appropriate authority.
  • Companies Act 2013/1956

2. Permission to Use the Name of BSE Listing Process in Issuer Company’s Prospectus

Companies have to take prior approval from BSE to use the name of BSE in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies

3. Submission of Letter of Application

A Letter of Application need to be submitted to all the stock exchanges where they want to get it listed before filing to the Concerned ROC

4. Allotment of Securities

As per the Listing Agreement, a company is required to complete the allotment of securities within 30 days of the date of closure of the subscription list to the public

5. Trading Permission

After the completion of allotment, within 7 working days, the issuer Company has to complete the formalities for trading at all the stock exchanges, where the securities are to be listed.

6. The requirement of 1% Security

Companies have to deposit 1% of the issue amount with the designated stock exchange before the issue opens.

7. Listing Fees

All listed companies are required to pay to BSE, an Annual Listing Fees by 30th April of every financial year

8. Compliance with the Listing Agreement

When companies get listed at stock exchanges, whether it is BSE/NSE Listing Process they are required to enter into an agreement which is called the listing Agreement under which they are required to file certain compliances and disclosures which are given by listing Agreement, failing which the company may face some disciplinary action, including suspension/delisting of securities. Under listing agreements, all the terms and conditions are written on the basis of which the company has to perform like

  • provide facilities for direct transfer, registration, sub-division, and consolidation of securities;
  • send proper notices of the closure of transfer books and record dates, forward 6 copies of Annual Reports, Balance Sheets and Profit and Loss Accounts to BSE
  • to file shareholding patterns and financial results on a quarterly basis;
  • to intimate Exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices,
  • to comply with the conditions of Corporate Governance, etc.

If you are desirous of getting the securities of your Company listed on the recognized stock exchanges, then Enterslice can help you in this regard. For details, visit our website www.enterslice.com or email your queries at info@enterslice.com.

Read our article: All you need to know about SEBI’s Insider Trading Regulations

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

Business Plan Consultant

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