Jordan Securities Commission Ratifies Instructions of Listing Securities at Amman Stock Exchange on 08/07/2012
08-Jul-2012
On July 4th.2012, the Board of Commissioners of Jordan Securities Commission (JSC) decided to approve the new ‘Instructions of Listing Securities at Amman Stock Exchange (ASE)’, to restructure Jordan capital market.
The new ‘Instructions’ changed the current division of the stock markets from two markets: (first & second), to three. Each market will have a different listing requirement from the other. Thus, companies to be listed in these three markets will differ from each other according to classification & distribution requirements taking into account the following standards: profitability, the company financial status & liquidity in terms of free float, number of shareholders & capital.
A Third Market for trading besides the first & second ones is created by virtue of the new ‘Instructions of Listing Securities at (ASE)’, so that the following types of companies will be listed in this market:
• Default companies &
• Companies violating the Instructions of Disclosure or Corporate Governance.
While newly listed companies permitted to operate since at least one year will be traded in the Second Market.
Concerning the First Market, the new ‘Instructions’ stipulates the following:
• The company must have pre-tax profits twice within the last three years &
• The company must have 5% of the net pre-tax profits for the last three years from the company paid in capital. To ensure the company ability to gain financial returns; a requirement of listing in the First Market & to ensure companies have recurrent & sound returns in the First Market.
Each listed company in (ASE) will be given a specific code specifying which market it will be listed in, allowing investors to clearly recognize levels of risks associated with listed companies.
To issue the final ‘Draft Project’ submitted for public debate via the national mass media, mutual efforts were made between (JSC) & (ASE) as well as, many experts & decision makers in Jordan capital market & notes were taken, prior the final ratification of these “Instructions”,
To enhance transparency & fairness & to increase market efficiency & liquidity, the new ‘Instructions of Listing Securities at (ASE)’ shall be effective on October 1st.2012 thus, attracting more investments to (ASE) on the national, regional & international levels, respectively.