Listing rules explained

The Port Moresby Stock Exchange

(POMSoX) has in place a set of listing rules that are necessary to protect the interests of listed companies and the reputation of the market, a seminar in Port Moresby was told.

Kina Securities Group General manager Syd Yates said this to participants at a Papua New Guinean seminar, organised by the PNG Institute of Accountants and two local brokers, about accessing the equities market.

He outlined to the participants some of the listing rules and requirements for companies that may consider listing on the local bourse.

Yates also told the seminar that if a company does not comply with the listing rules, its securities may be suspended from quotation or it may be removed from the official list. He said there are two main requirements for the companies that want to list on POMSoX - they must be admitted to the official list, and for their securities to begin trading, the securities must be granted an official quotation.

“There are prerequisites for both admission to the official list and official quotation. When applying for admission to the official list, an entity must complete and provide prescribed documentation to POMSoX, demonstrate compliance with the

listing rules and pay a listing fee,” Yates said. He also outlined the various categories under which companies can be listed, but spoke at length about the requirements for general admission to the exchange.

Some of the conditions which a company must meet before being admitted are; that its structure and operation must be appropriate for a listed company, its constitution must be consistent with the listing rules, there must be at least 300 shareholders, each having a parcel of the main class of securities with a value of at least K2OOO, excluding restricted securities, and that the company must satisfy either the profit test or the applicable net tangible assets.

Yates said the net tangible assets test only applies to a company seeking general admission, and not for investment, or mining exploration company. He also explained that dual listed companies also have a different criteria, and are currently admitted as foreign exempt companies.

Yates said the listing process can involve a “considerable commitment in terms of management time and expenses, however, the rewards may be significant,” and recommended that companies seek professional advice if they were planning to list. (Post Courier) ■

POMSoX operates under a set of guidelines given to it by the PNG parliament