LISTINGREGULATIONSOF LAHORESTOCKEXCHANGE

By SalmanAliBokhari AssistantManager,Risk&Clearing

ReasonsforListings
CompanieslistinStockExchangestoissueshares toraisemoneyfrominvestors Reasonforlistings
Abilitytoattractgeneralpublicforfinancing generalenjoyshigheresteemintheeyesofits debtorsandcreditors LowerfinancingCost Easierpledgingofsharesforshareholders betterabilitytodealwithRegulatorsonissues Easierfuturefinancing TaxincentivesforListedcompanies

ReasonsforMarkets
Anexchangeservesthreeprincipalfunctions: Capital EconomicFunction
Savers Borrowers

ContinuousPricingFunction FairPricingFunction

PrimaryandSecondaryMarkets
Primarymarket isthemarketwhereinvestorspurchasenewlyissued securities.
Initialpublicoffering(IPO): Aninitialpublicofferoccurs whenacompanyoffersstockforsaletothepublicforthe firsttime.

Secondarymarket isthemarketwhereinvestorstradepreviouslyissued securities.

Aninvestorcantradethroughabrokerwhoarranges transactionsforothers.

LSEListingsOverview

InstrumentslistedatLSE
OpenEnd Fund ClosedEnd Fund Bonds&TFC Future Contracts Equity

Instrument CommonStock PreferenceShares TermFinanceCertificates OpenEndFunds ClosedEndFunds

No.of 511 5 14 86 16

Common Stocks

Preference Shares

StatisticalComparisonofExchanges
* As on June 30, 2009

Particulars
TotalNo.ofCompanies listed ListedCapital (Rs.inbillion) MarketCapitalization(Rs. inbillion) Annualturnover AverageDaily (Millionshares) Securitieslistedduringthe year(C|D|F|P)

LSE*
511 728.331 2,018.232 2,719.706 11.100 9 (2|2|4|1)

KSE*
651 781.794 2,120.651 28,332.78 115.64 18 (8|1|9|0)

ISE*
261 608.420 1,705.017 272.300 1.11 N/A

C:Companies,D:Debt,F:Funds,P:PreferenceShares

BreakupofListedPaidupCapital

BreakupofMarketCapitalization

CoststoConsider
Advisor&ArrangertotheIssue LegalAdvisortotheIssue ComputerBalloter&RegistrartotheIssue CommissiontoBankerstotheIssueandtheUnderwriters BrokeragetotheMembersofStockExchange Advertising,PrintingandPublicationofaProspectus LSEinitiallistingfee&Annualfee
InitialListing:0.1%ofpaidupcapital

CentralDepositoryCompany(CDC)fee

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FromListingtoDeListing

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BookBuildingProcess

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ListingProcess

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ListingProcess(Contd)

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ListingRegulations

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ListingRegulations
OnlycompanieslistedmaybetradedattheExchange ListingRequirements
Memorandum&ArticlesofAssociation. Copiesofallmaterialcontractsandagreements NamesofDirectorsalongwithdirectorshipofothercompanies DraftProspectus/OfferforSale. AuditorsCertificate,separatelyindicatingthenumberof shares, Auditedaccountsforthelast5years CopiesoftheConsentLettersfrombankerstotheissue Statementshowingthecostofprojectandmeansoffinance.

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ListingRegulations
Stocks
Minimumpaidupcapitalnotlessthan200million Offerofsharestothegeneralpublicshallnotbelessthan Rs.100millionor25%ofthesharecapitalofthecompany, whicheverishigher.Issuermayallocate:
uptotwentypercentofthepublicoffertooverseasPakistanis. uptofivepercentofthepublicoffertoitsemployees.

Modarabas
30%ofthetotalPaidupcapitalshallbesubscribedbythe sponsorsortheirassociatesorfriends,relativesand associatedundertakings andthebalanceof70%shallbeofferedtoGeneralPublic

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OnGoingCompliance
Dividends:Informationtobesenttoexchangepriorto release Communicationofpricesensitiveinformation Sendingcopiesofannualreports21daysbeforemeetingof shareholders Sendingcopiesofquarterlyaccounts Annualmeetingwithin4monthsofclosingofannual financialyear FurnishcertifiedcopiesofminutesofAGMandEOGMin60 days ComplianceofCodeofCorporateGovernance QualityofAudit

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SUSPENSIONANDDEFAULTERS COUNTER
AlistedcompanymaybeplacedinDefaultersSegment,suspendedor delistedforanyofthefollowingreasons:
(a)ifitssecuritiesarequotedbelow50percentoffacevalueforacontinuous periodofthreeyears. (b)iffromthreeyearsofthedateofformallisting,ithasnotstarted commercialproductioninthecaseofamanufacturingcompanyorhasnot commencedbusinessinthecaseofanyothercompany. (c)ifithasfailedtoholditsannualgeneralmeetingforacontinuousperiodof threeyears. (d)ifithasgoneintoliquidationeithervoluntarilyorundercourtorder; (e)ifithasfailedtopaytheannuallistingfeesasprescribedinthese regulationspayabletotheExchangeforaperiodof2yearsorpenalty imposedundertheseregulationsoranyotherduespayabletothe Exchange; (f)ifithasfailedtocomplywiththerequirementsofanyofthelisting regulations; (g)ifthecompanyforanyreasonwhatsoeverrefusestojointhe CDSafterits securitieshavebeendeclaredeligiblesecuritiesbytheCDC.

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Delisting
VoluntaryDelisting: Anycompanyintendingtoseek voluntarydelistingfromtheExchangeshallintimatetothe Exchange,immediately,oftheintention.Minimum purchasepriceproposedbythesponsorswillbethe highestofthebenchmarkpricebasedonanyofthe following:
MarketPrice AverageMarketPrice(Annualized) Intrinsicvaluepershare(estimatednetrealizablevalueof assetsofthecompany) EarningsMultiplierapproach(forprofitablecompanies) ThemaximumpriceatwhichtheSponsorshadpurchasedthese sharesfromtheopenmarketintheprecedingoneyear.

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THANKYOU

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