{"id":6151,"date":"2022-11-08T20:12:59","date_gmt":"2022-11-08T20:12:59","guid":{"rendered":"https:\/\/commerceiets.com\/?p=6151"},"modified":"2022-11-08T20:12:59","modified_gmt":"2022-11-08T20:12:59","slug":"listing-of-securities-in-stock-exchange","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/listing-of-securities-in-stock-exchange\/","title":{"rendered":"LISTING OF SECURITIES IN STOCK EXCHANGE BEST NOTES"},"content":{"rendered":"\n<h4 class=\"wp-block-heading\">LISTING OF SECURITIES IN STOCK EXCHANGE : Meaning of listing and the legal requirements etc.<\/h4>\n\n\n\n<h3 class=\"wp-block-heading\">QUESTION: What is meant by listing of securities? Which documents are to be filled with stock exchanges for listing of securities?<\/h3>\n\n\n\n<p><strong>ANSWER: LISTING OF SECURITIES IN STOCK EXCHANGE: <\/strong>Listing means admission of securities of an issuer to\u00a0trading privileges or dealings on a stock exchange through a formal agreement.\u00a0<\/p>\n\n\n\n<p>In other words, listing of securities means permission to quote shares and debentures officially on trading floor of the stock exchange.<\/p>\n\n\n\n<p>The prime objective of listing or admission to dealings on the exchange is to provide liquidity and marketability to securities and also to provide a mechanism for effective control and supervision of trading.<\/p>\n\n\n\n<p><strong>DOCUMENTS REQUIRED FOR LISTING OF SECURITIES IN STOCK EXCHANGE : <\/strong>The following documents must be filed with the stock exchanges to get the securities listed:<\/p>\n\n\n\n<ul>\n<li>Memorandum of association and Articles of association<\/li>\n\n\n\n<li>Copies of all prospectus and statement in lieu of prospectus.<\/li>\n\n\n\n<li>Copies of balance sheets, audited accounts, agreements with promoters, underwriters, brokers etc.<\/li>\n\n\n\n<li>Letters of consent from controller of capital issuer, now replaced with SEBI.<\/li>\n\n\n\n<li>Details of share and debentures issued and shares forfeited.<\/li>\n\n\n\n<li>Details of issue of bonuses and dividends declared.<\/li>\n\n\n\n<li>History of the company in brief.<\/li>\n\n\n\n<li>Agreement with managing director, etc.<\/li>\n\n\n\n<li>An undertaking regarding compliance with the provisions of Companies Act, 2013 and Securities Regulation Act 1956 as well as rules made therein.<\/li>\n\n\n\n<li>A list of the highest ten holders of each class or kind of securities of the company.<\/li>\n<\/ul>\n\n\n\n<p><strong>PROCEDURE AND LEGAL REQUIREMENTS OF LISTING OF SECURITIES IN STOCK EXCHANGE:<\/strong> A company desires of listing its securities on the exchange shall be required to file an application with the stock exchange in the prescribed form.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"901\" height=\"698\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-17.png\" alt=\"LISTING OF SECURITIES IN STOCK EXCHANGE\" class=\"wp-image-6153\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-17.png 901w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-17-300x232.png 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-17-768x595.png 768w\" sizes=\"(max-width: 901px) 100vw, 901px\" \/><figcaption class=\"wp-element-caption\">LISTING OF SECURITIES IN STOCK EXCHANGE<\/figcaption><\/figure>\n\n\n\n<ol type=\"1\">\n<li><strong>APPLICATIONS IN RESPECT OF NEW ISSUES OR OFFERS FOR SALE OR BOOK-BUILDING: <\/strong>Tenders or applications for subscription or purchase or book-building in respect of any issue or offer for sale of any security shall not be submitted unless the issuer or officer offers to all a fair and equal opportunity for subscription or purchase and on the same terms as to brokerage to all the trading members.<\/li>\n<\/ol>\n\n\n\n<p>The issuer or the offeror, prior to issuing further securities or offering securities for sale, shall obtain an approval from these securities on the exchange.<\/p>\n\n\n\n<p>2. <strong>SUBMIT APPLICATION FOR ADMISSION TO DEALINGS: <\/strong>The issuer shall submit an application for admission of its securities to dealings on the exchange in the prescribed form after, ensuring compliance with the applicable provisions in the SCRA, SCRR, Companies Act and the rules, regulations and norms as may be issued by SEBI\/Exchange in this regard from time to time.<\/p>\n\n\n\n<p><strong>3. UNITS AND EXCHANGE TRADED FUNDS: <\/strong>Units of mutual funds may be admitted to dealings on the exchange subject to such conditions and requirements, as may be prescribed by the governing board or relevant authority from time to time.<\/p>\n\n\n\n<p><strong>4. OPTIONS OR FUTURES IN SECURITIES: <\/strong>Options or securities and in securities index or indices shall be admitted to dealings on the exchange by the governing board or relevant authority in authorized with the provisions of SCRA and norms issued by the SEBI from time to time as may be specified in the relevant bye-laws and regulations framed in this regard.<\/p>\n\n\n\n<p>5. <strong>NOTICE OF APPLICATION FOR ADMISSION TO DEALINGS: <\/strong>Notice of any application for admission to dealings on the exchange shall be posted on the notice board or displayed on the ATS or website of trading members and others, at least one week prior to its consideration by the exchange.<\/p>\n\n\n\n<p>6. <strong>UNDERWRITING, PLACING AND PRELIMINARY ARRANGEMENTS: <\/strong>A trading member shall not enter into an underwriting contract nor shall he contract either as a principal or agent or underwriter to subscribe, purchase or to procure securities.<\/p>\n\n\n\n<p><strong>7. LISTING CONDITIONS AND REQUIREMENTS: <\/strong>Listing requirements are the set of conditions imposed by a given stock exchange upon companies that want to be listed on the exchange.<\/p>\n\n\n\n<ul>\n<li><strong>Compliance with bye laws: <\/strong>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 and the Companies Act 2013.<\/li>\n\n\n\n<li><strong>Completion of allotment process: <\/strong>It must be ensured that no listing or trading permission is granted unless the issuer completes dispatch of physical share certificates to or demat shares to the accounts of all the security-holders, maintained with the depositories.<\/li>\n\n\n\n<li><strong>Information to the depository: <\/strong>Where the allotment has been decided by the exchange then stock exchange shall intimate the depositories about approval granted for admission to dealings on the exchange for any security.<\/li>\n\n\n\n<li><strong>Listing agreement: <\/strong>The company shall execute a listing agreement, in the prescribed form with the exchange, prior to approval of the listing application of the company.<\/li>\n\n\n\n<li><strong>Same day permission for trading: <\/strong>In case of new issue or further issue by any issuer, the governing board or relevant authority may grant permission for trading in any security at the exchange on the same day on all other stock exchanges where such security admitted to dealings is granted permission for trading.<\/li>\n<\/ul>\n\n\n\n<p>8. <strong>SECURITIES ISSUED ON PREFERENTIAL ALLOTMENT BASIS OR UNDER ESOP: <\/strong>Securities issued under preferential allotment or ESOP may be granted admission to dealings on the exchange on complying with the listing conditions, requirements and norms under SCRA, SCRR and the Companies Act 2013.<\/p>\n\n\n\n<p><strong>9. NO ADMISSION TO ISSUERS REGISTERED OUTSIDE INDIA: <\/strong>Admission to dealings on the exchange shall not be granted unless<\/p>\n\n\n\n<ul>\n<li>There is adequate public interest in such securities in India.<\/li>\n\n\n\n<li>The body corporate, fund or other entity agrees to abide by the applicable statutory provisions.<\/li>\n<\/ul>\n\n\n\n<p>10. <strong>WAIVING OF LISTING CONDITIONS OR REQUIREMENTS: <\/strong>In case of a body corporate formed or registered outside India, the governing board for reasons to be recorded in writing, waive or dispense with the strict enforcement of any or all of the listing conditions and requirements prescribed in these bye laws and regulations.<\/p>\n\n\n\n<!--nextpage-->\n\n\n\n<h3 class=\"wp-block-heading\">QUESTION: What are the functions and benefits of listing the securities in stock exchange?<\/h3>\n\n\n\n<p><strong>ANSWER: <\/strong><strong>LISTING OF SECURITIES IN STOCK EXCHANGE: <\/strong>Listing means admission of securities of an issuer to\u00a0\u00a0\u00a0 trading privileges or dealings on a stock exchange through a formal agreement.\u00a0<\/p>\n\n\n\n<p>In other words, listing of securities means permission to quote shares and debentures officially on trading floor of the stock exchange.<\/p>\n\n\n\n<p>The prime objective of listing or admission to dealings on the exchange is to provide liquidity and marketability to securities and also to provide a mechanism for effective control and supervision of trading.<\/p>\n\n\n\n<p><strong>FUNCTIONS AND BENEFITS OF LISTING OF SECURITIES IN STOCK EXCHANGE:<\/strong><\/p>\n\n\n\n<p>The listing of securities aims at<\/p>\n\n\n\n<ul>\n<li>Ensuring proper supervision and control in the dealing of the securities.<\/li>\n\n\n\n<li>To protect the interest of the shareholders and the investors by ensuring full disclosures.<\/li>\n\n\n\n<li>To avoid the concentration of economic power.<\/li>\n\n\n\n<li>To assure marketing facilities for the securities.<\/li>\n\n\n\n<li>To ensure liquidity of securities.<\/li>\n\n\n\n<li>To regulate dealings in securities.<\/li>\n\n\n\n<li>To require promoters to have a reasonable stake in the company.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"907\" height=\"535\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-18.png\" alt=\"LISTING OF SECURITIES IN STOCK EXCHANGE\" class=\"wp-image-6154\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-18.png 907w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-18-300x177.png 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-18-768x453.png 768w\" sizes=\"(max-width: 907px) 100vw, 907px\" \/><figcaption class=\"wp-element-caption\">LISTING OF SECURITIES IN STOCK EXCHANGE<\/figcaption><\/figure>\n\n\n\n<p><strong>ADVANTAGES FROM COMPANY\u2019S VIEWPOINT:<\/strong><\/p>\n\n\n\n<ol type=\"1\">\n<li><strong>EXTENSIVE MARKETS: <\/strong>Marketability of securities is increased as securities that companies issue are quoted and traded on the floor of the stock exchanges. Through, listing investors throughout the world can know about the securities and invest in them.<\/li>\n\n\n\n<li><strong>INCREASE IN THE VALUE OF SECURITIES: <\/strong>Due to rise in demand, value of securities increases because investors come to know throughout the world that certain securities are available and that they can invest in them.<\/li>\n\n\n\n<li><strong>KNOWLEDGE ABOUT INVESTMENT TO THE COMPANY: <\/strong>Through the quotations from stock exchange, companies get an idea about price fluctuations of securities and intensity of buyer\u2019s demand. In order to raise extra capital, companies can take proper decisions regarding terms of issue and whether to issue shares or debentures with the help of listing.<\/li>\n\n\n\n<li><strong>INCREASE IN CREDIT AND GOODWILL OF THE COMPANY: <\/strong>Company has to get permission from the stock exchange authorities in order to include its shares in the list of securities to be bought and sold on the floor of stock exchange. If a company is financially sound and managed by qualified people, authorities easily grant them permission. Companies are said to be sound, if their securities are listed. They enjoy better goodwill and credit in the market.<\/li>\n<\/ol>\n\n\n\n<p><strong>&nbsp;ADVANTAGES FROM INVESTOR\u2019S VIEWPOINT:<\/strong><\/p>\n\n\n\n<ol type=\"1\">\n<li><strong>FACILITY OF INVESTMENT: <\/strong>Investors can easily invest, in the listed securities because stock exchange provides assurance to investors regarding liquidity and safety of investment in such securities. Investors, as per their choice, can any time sell and buy the securities on a stock exchange.<\/li>\n\n\n\n<li><strong>PROTECTION OF INVESTOR\u2019S INTEREST: <\/strong>Stock exchanges are directly controlled by the central government and are regulated under the Securities Control Regulation Act 1956.&nbsp; These are well organized markets and safeguard and protect the interest of buyers and the sellers.<\/li>\n\n\n\n<li><strong>HIGH COLLATERAL VALUE: <\/strong>Banks and creditors prefer listed securities as collateral against losses because of borrowers and debtors who have pledged these securities with them become defaulters, banks and creditors can easily sell such securities.<\/li>\n\n\n\n<li><strong>PUBLICATION OF QUOTATIONS: <\/strong>It is the duty of stock exchange to publish the prices quoted for the securities on the floor on a regular basis. Buyers and sellers can easily decide whether to purchase or sell the securities after getting information regarding prices of the securities.<\/li>\n\n\n\n<li><strong>BEST POSSIBLE USE OF CAPITAL: <\/strong>Through stock exchange, investor can compare the relative demand of various securities on the basis of sale and purchase of those securities.<\/li>\n<\/ol>\n\n\n\n<p>Profitable companies attract more investors and also get a chance to invest their savings in more profitable firms, all because of listing of securities at stock exchange.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>ALSO STUDY:<\/strong><\/td><td><strong>ALSO STUDY:<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/depositories-act-1996-notes-for-bcom\/\">Depositories act 1996<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/functionaries-of-stock-exchange-pdf\/\">Functionaries of stock exchange<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/money-market-notes-for-bcom\/\">Money Market<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/primary-market-notes-for-bcom\/\">PRIMARY MARKET<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/secondary-market-notes-pdf\/\">SECONDARY MARKET<\/a><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-medium\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/Listing-on-Stock-Exchange-Benefits-1-300x158.jpg\" alt=\"LISTING OF SECURITIES IN STOCK EXCHANGE\" class=\"wp-image-6152\"\/><figcaption class=\"wp-element-caption\">LISTING OF SECURITIES IN STOCK EXCHANGE<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>LISTING OF SECURITIES IN STOCK EXCHANGE : Meaning of listing and the legal requirements etc. QUESTION: What is meant by listing of securities? Which documents are to be filled with stock exchanges for listing of securities? ANSWER: LISTING OF SECURITIES IN STOCK EXCHANGE: Listing means admission of securities of an issuer to\u00a0trading privileges or dealings&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/listing-of-securities-in-stock-exchange\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;LISTING OF SECURITIES IN STOCK EXCHANGE BEST NOTES&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":6154,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[253],"tags":[427,428,429,430],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/6151"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=6151"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/6151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/6154"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=6151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=6151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=6151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}