Post Listing Requirements on Official Market
The Stock Exchange of Mauritius Ltd (SEM) has the responsibility of ensuring the operation of an orderly market based on transparency and good governance. In order to achieve this objective, it is essential that listed companies publish price-sensitive information on a timely basis and in accordance with the Listing Rules. Timely publication of information provides the following benefits:
a. It helps in the marketability of the shares of companies.
b. It ensures that all investors are treated fairly and equally.
Listed companies must observe a number of post listing obligations , namely:
a. Any decision to pay any dividend or other distribution on listed securities, or any failure to pay any dividend or interest payment on debt securities.
b. Submit annual reports and interim (quarterly) reports within defined time frames.
c. Any proposed change in capital structure, issues and redemptions of securities
d. Any change in the rights attached to any class of listed securities
e. Any change in the directorate and any important change in the holding of an executive office
f. Any proposed alteration to the Memorandum and Articles of Association or Constitution of the company.
g. Any acquisition of shares of another company, or transaction resulting in such company becoming a subsidiary of the company.
It is vital that compliance with the Listing Rules is enforced for the benefit of all companies and the market as a whole.
The Listing Division monitors compliance with the Listing Rules in order to ensure that there is suitable protection for all market participants, including companies and investors. Chapter 3 of the Listing Rules has regard to the compliance and enforcement aspects of the Rules.
Guide to Continuing Listing Requirements
Disclosure of price sensitive information by listed companies should be done in such a way that the market is kept adequately informed at all times and that the creation of a false market is avoided.
Listed companies should ensure when and how cautionary announcements should be made while at the same time complying with all legal and regulatory requirements.
The following Guidelines are designed to help listed companies improve, in certain cases, the dissemination of price sensitive information to the market in order to protect investors and also to ensure the smooth operation of the market.
Guideline for Price Sensitive Information
“Price Sensitive Information” is referred to as any unpublished information, which, if released, might reasonably be expected materially to affect market activity in and the price of the issuer’s securities.
Listed companies, which are in possession of price sensitive information, should not release this information to selected groups of people only. To ensure fairness, Listing Rule 11.4 clearly states that:
“Information that is required to be disseminated pursuant to Rule 11.3 must not be given to a third party before it is notified to the SEM except as permitted in this Rule. An issuer may give information in strict confidence to its advisers and to persons with whom it is negotiating with a view to effecting a transaction or raising finance; these persons may include prospective underwriters of an issue of securities, providers of funds or loans or the placees of the balance of a rights issue not taken up by shareholders.
In such cases, the issuer must advise the recipients of such information that it is confidential and that they should not deal in the issuer's securities before the information has been made available to the public.”
The Duty of Cofidentiality
Listed companies should ensure that price sensitive information is kept confidential up to the publication of the information. Leakage of price sensitive information to the public should be avoided as this is unfair to both shareholders and investors.
The Duty to Disclose
The general principle of disclosure is reflected in the Listing Rules. In general, listed companies have to disclose any information which could have a material effect on their financial position or share prices. In this regard, listed companies have to make cautionary announcements as soon as possible whenever they are in possession of any price sensitive information. Disclosure of information is generally done by way of announcement to the market and through the press.
In this respect, the Listing Rules clearly state that:
“Generally and apart from compliance with all the specific requirements of these Listing Rules, the issuer shall keep the SEM, members of the issuer and other holders of its listed securities informed as soon as reasonably practicable of any information relating to the group (including information on any major new developments in the group's sphere of activity which is not public knowledge) which:
(a) is necessary to enable them and the public to appraise the position of the group;
(b) is necessary to avoid the establishment of a false market in its securities; and
(c) might reasonably be expected materially to affect market activity in and the price of its securities.”
Dealing with Media
Listed companies should ensure that when dealing with the media, they should be prepared to give a “no comment” answer when questions arise concerning rumors circulating in the market. If a press article contains price sensitive information about a listed issuer that may be inaccurate, the latter should ensure that a cautionary announcement is released as soon as reasonably practicable in order to avoid the establishment of a false market in its securities.