Listing is a derivative of the English word list (that is, "list"), which means that someone or something is marked as having preferences or access to some operations as a result of meeting certain requirements. The listing procedure is most often associated with the stock market, but it exists almost everywhere. For example, a retailer may define a list of suppliers who will bring goods for sale in his store.
Securities are usually listed by an exchange. For example, the Moscow Exchange updates the rules governing this process up to several times a year. Its rules apply to both shares of companies and bonds of organizations, municipalities, the Bank of Russia, etc.
Listing is a rather complicated procedure that begins with finding out whether a particular security meets the established requirements. Among them are: a registered issue prospectus, a state-registered report on the results of an issue, compliance by an organization that issued shares or bonds, etc., with the legislation of the Russian Federation (in the field of circulation of securities, required disclosure of information, etc.).
For a number of issuers, listing is a process accompanied by preliminary transfer of securities servicing to a special (settlement) depository (for certain types of shares and corporate securities), issuance of a global certificate (for municipal, sub-federal and state options).
Listing on the stock exchange is made on the basis of an application and a set of documents, which includes, among other things: the text of the decision to issue securities (in registered form), a questionnaire, a document on the amount of net assets of the organization that provided the guarantee (according to issued bonds), a document confirming the contractual relationship between the exchange and the issuer for admission to trading, a list of affiliates and much more.
Listing is a short-term process, but on condition that all required documents are correct. The set received from the organization is considered by the authorized department of the Exchange, after which, within 10 business days (for non-listed bonds, this period is reduced to 5 business days), a decision is made to include the security in one or another section of the list.
There are seven quotation sections on the Moscow Exchange today, forhitting each of which is required to comply with strictly established requirements (papers admitted for placement, subsections A (first level), A (second level), B, C, unlisted securities).
Just because a security is listed does not mean it will hold it indefinitely. The same body of the exchange may issue an opinion on the exclusion, in particular if:
- all securities of this type are redeemed (for example, bonds);
- if the issuer has ceased operations (bankrupt, etc.):
- if a court order or government order is received;
- if the issuer violates or does not comply with the law, etc.
In addition, it is allowed to exclude securities from the listing of the relevant section in order to transfer them to the status of non-listed.
