GUIDELINES AND STEPS FOR LISTING ON THE

GHANA STOCK EXCHANGE

1. Introduction

The steps and guidelines governing the admission of securities to listing on the Ghana Stock Exchange
are prescribed by the Ghana Stock Exchange Listing Regulations 1990 (LI 1509).

The actual approval of an application for listing of securities on the Exchange is the prerogative of the
Council of the Exchange. The council may in its judgement as it deems fit dispense with, or modify the
application of the rulebook in any particular circumstance.

Highlights of the process of listing company securities on the Exchange are indicated below.

2. Definition of “Listed”

This term may be freely applied to either the securities issuing company/institution or the securities
issued by a company/institution. In either case the vital implication is that the securities of the issuer has
been approved to be dealt in (i.e. purchased and sold) on the trading floor of the Stock Exchange. In
other jurisdictions the term "quoted" is used instead.

3. Original Listing Requirements

Currently, three classes of Official Lists (OL) have been prescribed by the Exchange's Regulations,
namely: First Official List (FOL), Second Official List (SOL) and Third official List (TOL). Their minimum
requirements are generally graduated downward in that order. Appendix 1 shows these requirements at
a glance.

The objective for creating these categories is to afford as many companies as possible, the opportunity
of gaining admission to the Stock Exchange and of reaping the advantages engendered by listing.

The requirements set out in the following pages and which are subject to modification or
dispensation by Council of the Ghana Stock Exchange relate mostly to the First Official List for
Equity securities.

Public Limited Liability Status

The company seeking listing must be a public limited liability company duly incorporated under the
Companies Code, 1963 (Act 179). The requirements for admitting companies registered outside
Ghana are quite similar to those applicable to locally registered companies.

Minimum Stated Capital

The company must have not less than ¢100million in the case of application for admission onto the FOL.

Minimum Public Holding

The value of the shares of the company, which should be issued to the public excluding employees of the
company and its associated companies, should not be less than ¢30milLion in the case of application
relating to the FOL. The minimum public float should not be less than 25% of the number of shares issued
by the company.

Fully paid shares

All shares for listing must be fully paid for. Only in very exceptional cases, will the Council, at its
discretion, admit partly paid shares.

© Ghana Stock Exchange

The spread of shares
This should be adequate in the estimation of the Exchange.

Debt securities
Corporate debt security may also be admitted to the FOL and SOL if the class of security involved has a
total issued amount of not less than ¢200million nominal value with not less than 100 holders. Debt
security for the TOL must be a minimum of ¢50million with at least 50 holders.

In the case of Government securities no thresholds are prescribed in respect of amount and number of
holders.

Debt securities, other than Government Securities for which listing is sought should be created by a
Trust Deed approved by the Exchange. The trustees should essentially be banks and life insurance
institutions.

Transferability of securities
The securities must be freely transferable (see also section 294 of Act 179)

Period of Existence & Profitability

For a company's securities to qualify for listing, it must have published or filed audited accounts for
• 5 years in the case of FOL,
• 3 years in the case of SOL, and
• 1 year in the case of TOL (which may be waived).
In each case the company must have made reasonable profit –taking the total period into consideration.

Management
There must be continuity of company management with a requisite level of competence and integrity
(also see sect. 182 of the Companies Code).

Audit sub- committee

There must be written evidence of the existence, operation and effectiveness of an Audit Sub-Committee
of the company's board of directors.

Membership of the Sub-Committee should comprise non-executive members of the board. The sub-
committee has oversight for the appointment and remuneration of auditors; review and evaluation of
internal control system; review of audited accounts; review of internal audit procedures and
effectiveness; the appraisal of the general conduct of the business of the company.

Prospectus
The company must issue a prospectus, which complies with the provisions of both the Companies Code,
1963 (Act 179) and the Exchange's rulebook.

4. Process of Listing

The steps required in original listing application process are as follows:

a) The company agrees to list and appoints a Licensed Dealing Member (LDM) to sponsor its
application.

• Specifically the LDM:

- ensures Council is made aware of all requisite information about the
company;
- files application , regulations of company, and other documents with the
Exchange on behalf of the company;
- vouches the suitability of applicant for listing;
- examines the composition of the company's board of directors for
competence and integrity; and
- may make a market in the company's securities.
2
© Ghana Stock Exchange
 • The company agrees to comply with the rules and regulations of the Exchange particularly
the continuing listing obligations.

• Securities for listing may be brought to any class of the Exchange's lists by means of :-
- prospectus issue.
- offer for sale.
- placing.
- introduction.
- rights offer.
- open offer.
- capitalisation issue.
- conversion of convertible securities.
- mergers, and acquisition etc.

b) The company through its LDM applies for listing and submits its regulations, applications and
draft prospectus to the Exchange for vetting. It also files supporting papers to the Exchange.

c) The Exchange notifies the company through its sponsoring broker on review of the document for
completeness and adequacy of deficiencies in the application, if any. Otherwise the application
is deemed finalised.

d) The recommendations of Management of the Exchange on the application are put before a
Listing Committee of the Exchange’s Council.

e) If endorsed, the application then goes to the full Council for a final decision and the company
through its LDM is advised accordingly.

f) The company files final printed copies of prospectus (vetted by the Exchange) with the Registrar
of Companies and the Exchange.

g) Where the company is issuing new shares, it issues prospectus to the public and offer period
begins.

h) At the end of the offer, the company announces basis of allotment of shares.

i) It issues share certificates pursuant to the allotment and informs the Exchange.

j) The shares are admitted to the Official List and traded on the Exchange seven days after the
despatch of relative certificates to shareholders.

5. Contents of Listing Application

The application consists of the application itself; draft prospectus, if required; and separate supporting
documents.

These should be submitted in good time before the date on which the applicant wishes to be admitted to
the Exchange’s Official List.

a) Broadly, the application itself must incorporate the following:

• title page;
• equity capitalisation;
• debt capital;
• nature of business;
• competition;
• patents, trademarks, licenses royalties, etc.;
• preceding years' financial statements;
• labour force;
• list of associated and trade investment;
3
© Ghana Stock Exchange
 • securities sold/issued in the preceding five (5) years (if applicable);
• dividend record over the last five years;
• pending litigations and other claims;
• particulars of directors and other officers; and
• brief particulars of management or technical contract.

b) The draft prospectus detailing all information required under the Companies Code and the
GSE’s Listing Regulations including profit forecast and cash flow for the ensuing year (with
underlying assumptions).

c) The supporting papers comprise copies (generally five) of each of:

• company's regulations;
• certificate of incorporation;
• certificate to commence business;
• resolution authorizing the company to apply for listing;
• the company's annual report and accounts for preceding five years (if applicable);
• specimen share certificate of the class to be listed;
• tax and SSNIT clearance certificates;
• names of top twenty (20) shareholders and their respective holdings,;
• certificate of share distribution signed by a director;
• undertaking to comply with listing regulations and other rules of the Exchange;
• subsisting material contracts (other than those contracted in the ordinary course of
business); and
• written evidence regarding the operation of Audit Sub-Committee of the applicant’s
board of directors.

d) Other documents
• Fixed asset valuation report.
• Copy of share price valuation report.
• Brief details of agreement with share registrar.
• Copies of subsisting material contracts.
• Confirmation by the company’s external solicitors that the company has complied with
all relevant legal provisions relating to prospectuses, etc.

6. Additional Listing Procedure

a) A company is obliged to list all its new shares of the class of shares already listed on the
Exchange.

b) The following steps are to be taken by a company seeking additional listing:

• The company announces to the Exchange a decision to issue additional securities - for
example through rights, capitalization, or prospectus issues.
• It submits application together with supporting documents to the Exchange
• The Exchange approves in principle the additional listing application.
• The company fixes relevant book closure dates and makes public announcement to the
Exchange of such dates, which the Exchange should release to the public.

c) The contents of the additional listing application is limited to only

• title page,
• equity capitalization, and
• long-term debt capital.

Most of the supporting documents are also required.

7. Cost of Listing
Fees payable by the company on listing are enshrined in the Listing Regulations and are essentially
based on the market capitalisation of the applicant company. Market capitalization in this instance will
4
© Ghana Stock Exchange
refer to the total number of shares already issued and to be issued multiplied by the offer price per
share.
The fees are at three levels. The lowest rates are for founder member companies of the Exchange
wishing to list. The next higher rates are for members who joined the Exchange after its establishment
and seeking to list their shares. The third and highest rates apply to companies that are not members at
all. The categories of fees are:

z application fees;
z hearing fees;
z listing fees; and
z annual listing fees.

8. Obligations of Listed Companies

a) Disclosure of Information
Listing imposes disclosure obligation on the company on continuing basis. The main objective of this
requirement is to foster transparency and investor protection. We seek to achieve this by ensuring that
timely information is always available to the general public to inform their decision making and to bring
about a fair and orderly market in securities. The obligation include information on corporate actions
such as:-
• closure of company registers;
• dividends and bonuses;
• company meetings;
• changes;
• winding up;
• financial reports;

b) Prevention of insider trading.

c) Maintenance of good public image

- good management and labour relations to minimize work stoppage and low productivity

Updated: February, 1999

Cyrstal\nes For Listing.GSE

5
© Ghana Stock Exchange