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Objectives of the listing

Companies go through the listing procedure, because this gives the issuer a number of advantages. The main goal of the companies is to obtain a cheap way of access to borrowed funds, as well as offer securities to a wide range of Russian and foreign investors. The listing procedure makes the company's shares and bonds more liquid, it increases the attractiveness of securities in the eyes of investors. This is their advantage over securities traded in the over-the-counter sector. The issuance of securities to exchange trades testifies to the entry of business to a higher level and enhances the company's credibility in the eyes of investors, helps to improve its image. Listing - a kind of advertising brand. Passage of the listing procedure serves as an indicator that speaks about the reliability and financial stability of the company. It becomes easier for them to get loans in banks. From the standpoint of the exchange itself, the listing of securities is carried out in order to create optimal conditions for conducting trades, raises the awareness of investors about the securities market, allows identifying reliable issuers, protects the interests of investors, creates unified rules for access to trading. The reverse procedure of listing is delisting. This procedure is carried out in the event of bankruptcy of the company, suspension of its activities, violation of the listing rules by the company.

Listing procedure

In order for a company's shares or bonds to beare admitted to trading on the exchange, they are presented with a number of requirements. Among them, the size of capitalization, the number of securities, the amount of revenue, net profit, the minimum trade balance, etc. The issuing company must meet the principles of openness and transparency of business. The listing rules are individual on each exchange. They are based on the current legislation in the field of securities. For example, on the MICEX listing procedure consists of the following stages. Initially, the application for the procedure for listing securities. It is accompanied by documents that confirm the company's compliance with the established requirements. Within 10 days, the exchange considers the documents and, if the decision is positive, an agreement is concluded to conduct the examination. After the examination, which can take 45 days, a listing agreement with the issuing company is concluded. When listing securities on the London Stock Exchange, the securities prospectus must be registered with the UK Listing Authority. Also, the company will need financial statements for the last 3 years according to IFRS standards. At the time of listing at least 1/4 of the total amount of securities should be free float in Europe. On other exchanges, the listing procedure is generally similar.