NASDAQ Dubai this week annnounced proposals for significant changes to its Listing Rules, including steps to increase participation by individual investors in initial public offerings (IPOs). The exchange welcomes public feedback on its proposals.
All IPOs would be required to reserve at least 10% of the offer for individual investors, or else have a minimum of 400 institutional or individual security holders, under the proposals. The current rules contain no minimum requirements.
Jeff Singer, Chief Executive of NASDAQ Dubai, said: "These proposals would ensure that IPOs have a broad investor base from day one and can be easily bought by individual and other investors after listing. We are also proposing new and more flexible rules aimed at attracting family companies and small and medium enterprises."
Under the proposals, NASDAQ Dubai's existing rule that accepts companies with a minimum market capitalisation of 50 million dollars would be retained. In addition, a new rule would allow listings by companies with a market capitalisation as low as 20 million dollars, provided that in such cases the pre-IPO shareholders undertake not to sell their shares within a year of the IPO.
The rule changes would also allow companies to list without any minimum market capitalisation, provided they meet specific criteria of profitability (of 1 million dollars for the most recent 12 months, and an aggregate of 10 million dollars over the most recent three years), or else hold net tangible assets of 10 million dollars. Specific rules are proposed for listing mining, oil and gas companies.
The new proposals would require all equity IPOs to be offered via a prospectus in the Dubai International Financial Centre (DIFC). The prospectus would be filed with Dubai Financial Services Authority (DFSA), the regulator of NASDAQ Dubai.
The rule changes would also strengthen NASDAQ Dubai's framework for listing exchange traded funds (ETFs) and Real Estate Investment Trusts (REITS). The rules for listing exchange-traded commodities (ETCs) and Sharia securities have been revised.
To support NASDAQ Dubai's debt sector, issuers of Sukuk and conventional bonds would be encouraged to obtain an investment grade credit rating before listing.
The proposals can be read in full at http://www.nasdaqdubai.com/marketinfo/market_news.html . Public consultation will last for 60 days and feedback can be given through the website.
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