The procedure for admitting securities on the stock exchange is changing

The stock exchanges are given the opportunity to divide the trading day into pre-session and post-session. This will allow dividing the trading day into the corresponding periods and trading sessions for submitting the corresponding orders for the purchase and sale of securities, other financial instruments and conclusion of exchange contracts. It is expected that such a decision will contribute to an increase in the number of market makers and the liquidity of the securities market.

The corresponding changes to the Regulation on the operation of stock exchanges were approved by the decision of the National Securities and Stock Market Commission of August 3, 2018 No. 546 and entered into force on September 25. The stock exchanges within three months need to bring their activities in compliance with the new requirements.

The owners of securities of large enterprises and public joint-stock companies have the right, on their own initiative, to include securities in the exchange list by submitting a corresponding offer, but under the condition that the total value of the package of securities offered for sale is at least 5 million UAH.

In this case, the stock exchange shall notify the issuer in writing of the receipt of the application and the inclusion of securities in the exchange list (with the date of entry).

Upon receipt of an application for the admission to trading of other securities or shares, the stock exchange sends information to such an issuer on:

(a) receiving an offer to include the issuer’s securities in the exchange list;

(b) the consequences of the inclusion of securities in the exchange list, namely the classification of the issuer of securities to the category of enterprises of public interest;

(c) the need to obtain from the issuer a written consent / disagreement on the inclusion of its securities in the exchange list.

Only after obtaining the written consent of the issuer, the stock exchange can include the securities in the exchange list.

Admission of securities of foreign issuers to trading can only be carried out in the event of admission of such securities to circulation on the territory of Ukraine. The procedure for placing such securities in the exchange list and the exchange register is established by the rules of the stock exchange.

It has also been established that the procedure for organizing and conducting exchange trading, in particular, should contain procedures to prevent price manipulation during operations with securities and other financial instruments if they are introduced into circulation on the stock exchange.

The stock exchange annually and quarterly (in the case of the issuer disclosing interim financial statements) will check the issuer whose securities are on the exchange list for compliance with the signs of fictitiousness.

The National Securities and Stock Market Commission also simplified the requirements for listing by abolishing the provision on dividing the exchange register into two listing levels and establishing the requirements for entering securities into the exchange register. Requirements for listing and staying of securities in the listing are set at the second level. Securities that have passed the listing procedure are entered into the exchange register. The application for admission of securities to exchange trading in terms of inclusion in the exchange register may be submitted: by the issuer in the process of emission; the issuer regarding the repurchased securities; offeror regarding the sale of his securities. Such an application is submitted subject to the validity of the prospectus of securities and its publication.

The stock exchanges have three months to bring their activities in line with the new rules and take the following actions with respect to securities that are on the stock list as of the effective date of this decision, namely:

(a) within a period of not more than one month, notify the issuers in writing of the need to bring their activities in line with the changes on the conditions of the securities in the stock register before January 1, 2019, in particular, issuing the securities prospectus in accordance with the requirements of the current legislation of Ukraine; or in the exchange list without entering into the exchange register;

(b) notify the issuers that are private joint-stock companies within 15 days in advance of the need to provide the stock exchange with information on the presence (absence) in the charter of such a company of the preemptive right of its shareholders to buy shares offered by the owner for sale to a third party.