By Capital Market Development Authority IP IPO Processes Shariah - PowerPoint PPT Presentation

By Capital Market Development Authority

IP IPO Processes • Shariah Screening (for companies seeking to issue shariah compliant equity securities) • Prospectus Registration • Listing Approval • Publication of Prospectus • Open and close of subscriptions • Allotment & Deposit of Securities • Listing

Shariah Screening • A company seeking to issue shariah compliant equity securities in the capital market will have to obtain a shariah compliant endorsement from the Authority. • For this process, a shariah screening application should be submitted to the Authority. • The application should be prepared in accordance with the Regulation on Shariah Screening of Equity Securities 2013 /R-55 https://www.cmda.gov.mv/assets/Laws-and-Regulations/Islamic-Capital- Market/Regulation-on-Islamic-Securities-Screening-English.pdf • Shariah Application should include: • Annual Report • The last audited financial statements • Shariah Audit Report (If any) – An internal report assessing compliance to the regulation

Shariah Screening • Application will be evaluated by the Shariah Advisory Council of the Authority based on the criteria stipulated in the Regulation • Upon fulfillment of the shariah requirements set out in the regulation, the council will issue a shariah compliant endorsement and the Authority will make a public announcement of the result of the screening.

Semi-annual Shariah Screening • A company classified as compliant under these regulations is subject to further screening semi-annually. • For semi- annual screening, the company should submit the quarterly reports published pursuant to the Regulation on Continuing Disclosure Obligations of Issuers.

Prospectus Registration • A CMDA registered prospectus is a mandatory requirement for a company going for a public offering. • The prospectus submitted to the Authority for registration should fulfil the requirements of the Regulation on Issuance of Securities of CMDA & the Prospectus Requirements issued under the Companies Act. https://www.cmda.gov.mv/assets/Laws-and-Regulations/Laws/Prospectus-Regulation- unofficail-translation-EN.pdf https://www.cmda.gov.mv/assets/Laws-and-Regulations/Regulation-Maldives- Securities-Act/Regulation-on-Issuance-of-Securities-2011-Eng.pdf • RoC registration should also be sought prior to publishing the prospectus.

Prospectus Registration • The Authority will evaluate the prospectus against the requirements of the prospectus regulations - Mainly if the disclosures required under the regulations are made giving sufficient details. • Apart from ensuring the inclusion of all necessary information / disclosures, the company should give due care and ensure that the prospectus is presented in a orderly and simple and easy to understand manner. • The Authority will provide a prospectus checklist which has to be filled and provided along with the prospectus when it is submitted for vetting by the Authority. • Prospectus process involves exchange of regulatory comments and resubmission by the company after incorporating the necessary changes according to the regulatory comments provided by the Authority. Resubmissions will take place until the Authority is satisfied that the regulatory requirements are met. • Prospectus registration and shariah screening fee should be paid to the Authority when invoiced. .

Criteria for public offer approval by CMDA • Should be a public company registered in the Maldives. • Should register a prospectus with CMDA & RoC. • Last audited financials submitted with the prospectus should not be more than 9 months old. • Should make a listing application to the Maldives Stock Exchange.

Listing Approval • Listing application should be made to MSE according to the Listing Rules. https://www.cmda.gov.mv/assets/Laws-and-Regulations/MSE-Rules/Listing-Rules-effective-from-21st- December-2015.pdf • Application should fulfil the criteria set out in the listing rules. • Equity listing application should fulfil either the main board equity listing or the second board equity listing criteria. • Debt listing applications should fulfil the debt listing criteria. • Approval for listing must be sought prior to publication of the prospectus. Listing approval process and prospectus registration process is therefore carried forward simultaneously. • Listing application processing fee & the annual listing fees is to be paid to MSE.

Publication of f Prospectus • Following CMDA, RoC & MSE approval, prospectus can be published. • Should announce publication of prospectus through at least one media channel with national reach. • Should be available from the company website. • Should be available for minimum 14 days before the subscription is opened.

Promotional activities / IP IPO advertisements • Can do public announcements of intention to go public before prospectus approval. • IPO Adverts of general nature can be done before prospectus approval. • IPO Adverts should be in line with prospectus and should not be misleading in any form.

Open and Close of f Subscriptions • Can be minimum 15 market days and maximum 35 market days – Can request for extension if need arise. Extension Request should be made to MSE. • Online subscription applications: Can use Infinity by MSE/ MSD for allowing online subscriptions. • Physical subscription applications: Can appoint collection agents. • Subscription applications should be maintained in records of the issuer/company.

Demat offer • Should disclose in prospectus that it’s a demat offer. • MSD account opening form should be made available along with the subscription application form. • Securities will be deposited to MSD accounts instead of issuing physical certificate.

Allotment & Deposit • Company should allot and send allotment list to MSD within 14 market days from close of offer. • MSD will generate a deposit request to company within 14 market days. • Company shall approve deposit request within 5 market days. • MSD will deposit securities to the MSD accounts of the investors and send confirmation of deposit to the company within 5 market days. • Upon receival of deposit confirmation from MSD, company should make a public announcement of lodgement of shares into MSD accounts and should notify shareholders in writing the number of shares allotted and the MSD account number of the shareholders within 5 market days. • Following the public announcement of lodgement of securities to MSD, MSE will announce the official listing of the securities on the Stock Exchange.

Disclosures Requirements • Regulation on Continuing Disclosure Obligation of Issuers https://www.cmda.gov.mv/assets/Laws-and-Regulations/Regulation-Maldives-Securities-Act/Securities-Continuing- Disclosure-English.pdf • Immediate / Timely disclosure of price sensitive information (dividends, acquisition and disposal of assets, material contracts etc). • Quarterly Reports – To be published 30 days following end of every quarter (Refer to Minimum Quarterly Reporting Requirements). https://www.cmda.gov.mv/assets/Circulars/2009/Quarterly-Reporting-Standards-Listed-Companies-Dhivehi.pdf • Annual Report & Audited Financial Statements – Within 4 months following end of financial year. • AGM Notice – 14 prior to meeting (meeting has to be conducted within 5 months from close of financial year). *Company should post on the website and make a media announcement as well.