Jordan Times
Wednesday, May 19, 2004
New instructions for listing
securities widens authority of ASE
Modern law to take effect from July 1
By Rami Abdelrahman
AMMAN — A modern and globally-standardised Securities' Listing Law issued by the
Amman Stock Exchange (ASE) recently, divides the trading market into two
categories (a first and a second market) based on companies' equity,
profitability, number of investors, liquidity standards, available shares and
disclosure.
ASE's CEO Jalil Tarif told The Jordan Times on the sidelines of the
International Organisation of Securities Commissions meetings that the new law
will be put into effect as of July 1, 2004.
“The new law introduces for the first time the concept of continuous listing, a
step that obliges listed companies in the first market to keep up the listing
requirements as long as they operate at the first market,” explained Tarif.
The first market listing requirements will include only companies whose net
equity equals paid-up capital, posted gross profits for at least the last two
years and whose circulating shares account for more than 10 per cent of the
available shares traded within at least 20 per cent of trading days during a
specified period. The requirements also obliges first market companies to have
more than 100 shareholders with at least five per cent of a company's shares
available for trading if the total capital is more than JD50 million, and 10 per
cent if it is less than JD50 million.
Each first market company will have to submit a financial report, revised and
audited by specialised auditors, at the end of each quarter of the fiscal year.
Tarif said any company that does not meet the requirements will be relegated to
a second market.
The new law compels each company in the stock market to have a specialised audit
committee.
Concerning private shareholding companies, the new law allows such companies to
issue bonds and shares at the stock market. It also allows listing of securities
in non-Jordanian currencies, and non-Jordanian securities on the ASE.
Tarif said the ASE will organise listing of Jordanian securities on stock
exchanges other than the Amman Bourse.
The new law, entitled “Instructions for Listing Securities on the Amman Stock
Exchange,” widened the authority of the ASE in handling its relations with
public shareholding companies, as it allows the ASE to request companies to
provide any financial information that could affect its share price.
The current ASE law will be cancelled once this law is put into effect.