Listing agreement


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Listing agreement

  1. 1. Listing Agreement <ul><li>Presentation by </li></ul><ul><li>Divya Raman </li></ul><ul><li>Corporate Department </li></ul><ul><li>Dated 31.01.2012 </li></ul>
  2. 3. LISTING AGREEMENT <ul><li>Listing Agreement is a document which a Company signs when being listed on the Stock Exchange, in which it promises to abide by stock exchange regulations. </li></ul>
  3. 4. LISTING <ul><li>Listing means admission of securities for dealings on specified stock exchanges. The securities maybe of a public limited company, Central/State Government, quasi governmental and other financial institutions /corporations/municipalities, etc. The Companies desirous of getting their securities listed are required to enter into an agreement with the Exchange called the Listing Agreement and are required to make certain disclosures and perform certain acts. </li></ul>
  4. 5. Importance of Listing Agreement <ul><li>Company undertakes to provide prompt facilities like transfer, consolidation, sub-division, consolidation of securities. </li></ul><ul><li>Provide proper notice for record dates and book closure. </li></ul><ul><li>Furnish accounts on quarterly basis. </li></ul><ul><li>Intimate Stock Exchanges the happenings which are likely to affect the financial performance of the company & its stock prices. </li></ul>
  5. 6. Importance Contd… <ul><ul><li>Comply with the corporate governance conditions. </li></ul></ul><ul><ul><li>Forward copies of its annual report and accounts to its shareholders. </li></ul></ul>
  6. 7. Important Clauses in Listing Agreement <ul><li>Clause 16 . </li></ul><ul><li>Give notice to SE stating the date & purpose for register closure or of record date. </li></ul><ul><li>SE to be intimated at least 7 days before such closure or record date. </li></ul><ul><ul><li>for purposes of declaration of dividend or </li></ul></ul><ul><ul><li>the issue of right or bonus shares or </li></ul></ul><ul><ul><li>issue of shares for conversion of debentures or of shares arising out of rights attached to debentures </li></ul></ul><ul><ul><li>Close register of transfers once a year at the time of AGM </li></ul></ul>
  7. 8. Important Clauses Contd… <ul><li>The company on whose stocks, derivatives are available or whose stocks form part of an index on which derivatives are available, shall give a notice period of 30 days to stock exchanges for corporate actions like mergers, de-mergers, splits and bonus shares. </li></ul><ul><li>Company not to have a gap of less than 30 days between two book closures/record date. </li></ul>
  8. 9. <ul><li>Clause 19: </li></ul><ul><li>Prior intimation to the Exchange about the Board Meeting at which proposal for Buyback of Securities, declaration/recommendation of Dividend or Rights or issue of convertible debentures or of debentures carrying a right to subscribe to equity shares or the passing over of dividend or the issue of right is due to be considered at least 2 working days in advance. </li></ul><ul><li>Simultaneous notice in case of proposal of declaration of Bonus is communicated to the Board of Directors.   </li></ul>
  9. 10. Clause 20 & 22 <ul><li>Under Clauses 20 and 22 of the Listing Agreement companies are required to intimate to the stock exchange, immediately after the meeting of Board of Directors, regarding the decisions taken in respect of declaration of dividend or rights or bonus etc. In order to avoid excessive volatility in stock prices due to announcement regarding dividend, rights etc., during the Market Hours, such announcement shall be made immediately on the date of the Board Meeting only after the close of the Market Hours. </li></ul>
  10. 11. Clause 35 & 40A <ul><li>Clause 35 : Within 21 days from the end of every quarter, file the shareholding pattern of the company with the Stock Exchanges. </li></ul><ul><li>Clause 40A : The provision requires a company to maintain on a continuous basis, public shareholding of at least 25% of the total number of issued shares of a class or kind, for every such class or kind of its shares which are listed. </li></ul>
  11. 12. Clause 49 <ul><li>Corporate Governance – Company to comply with certain requirements </li></ul><ul><ul><li>Board of Directors. </li></ul></ul><ul><ul><li>Audit Committee. </li></ul></ul><ul><ul><li>Subsidiary Companies. </li></ul></ul><ul><ul><li>Disclosures. </li></ul></ul><ul><ul><li>CEO/CFO Certification. </li></ul></ul><ul><ul><li>Report on Corporate Governance. </li></ul></ul><ul><ul><li>Compliance. </li></ul></ul>
  12. 13. Listing Agreement in real estate <ul><li>A listing agreement is an agreement between a real estate broker (or his/her agent representatives, acting in the broker's name) and a seller or sellers of real property to give the broker the right to offer the property for sale. </li></ul>
  13. 14. Essentials of Listing Agreement (If the broker is a member of the National Association of Realtors) <ul><li>A beginning date and a termination date. </li></ul><ul><li>The list price at which the property will be offered for sale. </li></ul><ul><li>The amount of compensation offered to the broker, whether it is in the form of a flat fee or percentage of the sales price. </li></ul>
  14. 15. Essentials of Listing Agreement Contd… <ul><li>The terms and conditions under which the brokerage fee shall be paid by the seller. </li></ul><ul><li>Authorizes the broker to co-operate with other brokers as sub-agents or buyer's agents and details the compensation to be offered to those brokers in the event they procure a buyer. </li></ul><ul><li>Authorizes the broker to reveal or not to reveal the existence of offers previously received. </li></ul>
  15. 16. <ul><li>TYPES OF LISTING AGREEMENT </li></ul><ul><li>Exclusive right to sell: The seller must pay the broker a commission if, by the expiration date in the listing contract, the real estate is sold, regardless of whether the buyer is obtained through the agency or not. Even if the seller finds the buyer him/herself, a commission is still owed to the broker. Furthermore, the seller cannot list the property with any other broker until the listing expires with the property unsold. </li></ul>
  16. 17. Types Contd… <ul><li>2. Exclusive Agency : The seller can only list the property with one broker until the listing contract expires with the property unsold. The seller must pay the broker a commission if the real estate is sold to a buyer obtained through that broker. By agreement, if the seller finds the buyer him/herself, the seller does not have to pay a commission. Since there will be no co-operating broker involved, the property will not be listed in the MLS. </li></ul>
  17. 18. Types Contd… <ul><li>3. Open Agency : A seller can enter into an agreement to sell his/her property with more than one broker in open agency listings. The seller must pay a commission only to the broker which brings the buyer for the real estate. Typically, if the seller finds the buyer him/herself, the seller does not have to pay a commission. </li></ul>
  18. 19. Expiration Date <ul><li>Listing a property commonly incurs certain expenses for the listing broker and takes some time and effort for the listing salesperson. To make it worthwhile, they want a certain minimum listing time period to have a good chance of selling the property. However, the listing contract must have an expiration date. A typical listing period is often from 3 or 4 months to 6 months. If the property is not sold or under a purchase contract by then, the seller may decide to re-list the property, perhaps with a different listing price, with the same or a different broker or agent, or not list it at all. The listing of the property can start at a date later than the date the listing contract is signed to allow the seller time to prepare the property for showing or sale. </li></ul>