Question

write a essay describing the regulations used by south pacific stock exchange to govern its listed companies and stockbrokers in fiji

Answer 1

Below are rules prescribed by South PAcific Stock Exchange:

Capital Requirements

>For the listing of shares, the total market capitalization of the company must be at least $1 million.

>For the listing of debt securities, the company must have net tangible assets at the time of listing of at least $1 million.

Public Shareholding :

There must be an open market in the securities for which listing is sought. For ordinary shares, this means that a minimum of 20% of the total issued shares must be owned by at least fifty (50) members of the publicand for any other types of securities, there must be at least twenty-five (25) members of the public as security holders. In the case of debt securities, the aggregate face value must be at least $500,000. If the company does not meet the public shareholding requirements at the time of application, the SPSE may consider the listing application if there are arrangements in place which will result in the public shareholding requirements being achieved by the end of an agreed period.

A company shall immediately disclose to the SPSE any information about the company or about events or conditions in the market for the listed securities in either of the following circumstances: i. where the information is likely to have a significant effect on the price of the listed securities; ii. where such information is likely to be considered important by a reasonable investor in making an investment decision

>A company should respond to any inquiries made by the SPSE within the timeframe stipulated in the following circumstances: i. if there are rumours or reports regarding the company; ii. where there is unusual price movement and/or trading activity in the company?s shares without any apparent publicly available information.

>Immediate Announcements must be made in the following circumstances: i. proposed joint venture, merger, acquisition or takeover; ii. decision to recommend and declare a dividend, or a decision to not declare a dividend. Any declaration of dividend should be disclosed in the format outlined in Appendix F; iii. decision to change the capital structure of the company. This includes issue of shares; iv. change in the key personnel including chairman, directors, company secretary and senior staff; v. change in registrars or auditors; vi. change of address of the registered office or of any office at which the register of the securities of the company is kept; vii. change in control; viii. entry into possession of or the sale by any mortgagee of a portion of the assets; ix. occurrence of any event which would result in the winding up of the company or any of its subsidiaries or the appointment of a receiver or liquidator for the company or any of its subsidiaries; x. judicial or quasi judicial actions initiated by or against the company; xi. acquisition or loss of a significant contract; xii. change in the company?s financial forecast or expectation; xiii. any over-subscription or under-subscription of an issue of securities; xiv. a change in capital investment plans; xv. any changes in the corporate purpose and any alterations in the company?s general nature of business or the initiation of new ones; xvi. any transaction by the company or its subsidiaries that will have a significant impact on the company. Normally an amount of 5% or more of the company?s assets would be significant but a smaller amount may be significant in a particular case;xvii. any licensing or franchising agreement or its cancellation which may affect operations; xviii. any occurrence of an event of default under the terms and conditions of any issue of debentures, promissory notes, bonds or any other security issued by the company; xix. any penalties imposed by statutory authorities; xx. any acquisition of voting rights which results in the company becoming the holding company; xxi. any change in substantial shareholding. A change in substantial shareholding occurs when: a. a shareholder begins to have, or ceases to have, a substantial shareholding in the company or b. a substantial shareholder changes his cumulative shareholding by 5%. Any change in substantial shareholding should be disclosed in the format outlined in Appendix I; 4 xxii. a change to the exercise price of an option, or the number of underlying securities over which the option is exercisable, and the date the changes become effective. The company must tell SPSE at least five (5) business days before the changes become effective; xxiii. in any other circumstance that the SPSE considers proper in its absolute discretion

>A company must send a copy of its half yearly consolidated accounts/reports containing at least the information specified in Appendix D to the SPSE as soon as the accounts are available or no later than two (2) months after the end of each half year accounting period.

All half yearly accounts/reports shall be approved by the company?s Board of Directors and signed by either two (2) Directors or one (1) Director and Company Secretary of the company and should state whether or not the half yearly accounts/reports are audited.

>A company must send a copy of its annual audited financial statements to the SPSE as soon as the accounts are available or no later than three (3) months after the end of the annual accounting period.

>The minimum number of Directors (other than alternate Directors) shall be three (3). At least one third of the Directors must be independent.At least two (2) Directors shall be Fiji residents.

>A company must not acquire, dispose or lease an asset or borrow, lend, pay and receive an amount or enter into an obligation of an amount with value greater than 5% of the total equity market capitalization from the Related parties without approval from shareholders

>If the SPSE considers that a company has contravened the Listing Rules it may do one or more of the following: i. censure the company, which may include a formal written notice of censure being served upon the company and the requirement that the company provide a written explanation of its actions to the SPSE and an undertaking to rectify the breach immediately; ii. publish the fact that the company has been censured for failing to comply with the Listing Rules; iii. impose a daily fine according to Appendix G; iv. halt or suspend trading in the securities or delist the company