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Listing SME’s on Qatar Exchange

Al Tamimi & Company


The new regulations

The Qatar Financial Market Authority (the “QFMA) has recently issued the Offering and Listing Rule Book in relation to Securities of Small and Medium Enterprises (the “Regulations).  The Regulations reflect the awareness of the QFMA of the important and vital role that Small and Medium Enterprises (the “SMEs”) play in the national economy, and that giving the opportunity to SMEs to list their shares in the capital market will provide such SMEs with funding mechanisms to help them expand, and reach out, to new markets, and correspondingly support the national economy.

 

Benefits

The Regulations include a package of benefits for SMEs to motivate such SMEs to list their stock in the Venture Market (the market designated for trading of SMEs shares in the Qatar Exchange). The Regulations provide for offering and listing requirements which are more flexible compared to those of the Main Market in relation to minimum capital requirements, shareholders, number of shares required to be offered for public subscription, financial history of the company, in addition to less disclosure requirements which do not prejudice the security and integrity of the capital market.

 

Requirements

Forms of SMEs that can be listed

SMEs which are joint-stock companies with commercial registration from Ministry of Business and Trade, may apply to list their shares in the Venture Market. Other forms of SMEs may be transformed into joint stock companies prior to filing an application for listing their shares in the Venture Market.

 

Type of shares that can be listed 

 

Ordinary shares. Whole class must be listed.

 

Business track record requirements for SMEs applying to list

 

One year track record of core business requirement and issued audited financial statements for that year.

 

Accounting standards required for SMEs’ reports

 

Reports must be drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).

 

Working capital requirements 

 

There is no specific testing relation to working capital, but ‘adequacy of working capital’ statement to be provided by SMEs applying for listing in the Venture Market.

 

Minimum capital requirements for SME’s capital? 

 

Minimum subscribed capital of QR 5 million. Minimum of 50% of the nominal value must be paid (100% required in the case of public offering). 

 

Minimum free float required by the QFMA for SMEs applying for listing

 

The QFMA requires an SME to have a minimum free float of 10%.

 

 

Disclosure

Ongoing disclosure

  • All types of information/events capable of affecting the price of the securities.
  • Time and venue of AGM & EGM (to be made available to shareholders a minimum fifteen calendar days prior to the meeting).
  • Date of Board of Directors meeting to discuss semi-annual and annual financial results (minimum fifteen calendar days prior to meeting).
  • Any decision relating to the rights of securities holders.
  • Details of pending or future lawsuits which may have a meaningful impact on business.
  • Companies must notify the Exchange without delay of all major developments and any side information.

 

Periodic disclosure

  • Quarterly reports within 30 days of end of relevant period.
  • Semi-annual reviewed reports within 45 days of end of relevant period.
  • Audited annual reports within 90 days of end of relevant period.

 

Means of notification 

Qatar Exchange website, the SME website and two local newspapers one of which shall be in the Arabic language in case of periodical financial reports.

 

Disclosure criteria 

The information disclosed in periodic reports should be fairly presented, not be misleading or deceptive and should not contain any material omission of information. Furthermore, the information should be presented in a clear and concise manner.

 

Equivalence of Disclosure 

All information made available to one market should be made available promptly to all markets in which the SME is listed.

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