Distribution of Equity Securities
Directive Distribution of Equity Securities
Distribution of Equity Securities
I. GENERAL PROVISIONS
Art. 1 Objects
This Directive provides additional provisions regarding the requirements for maintaining a sufficient free float of equity securities, as outlined in LR20.
Art. 2 Purpose
The requirements for minimum public free float and capitalization are designed to ensure the tradability of equity securities and promote consistency across issuers.
Art. 3 Scope and applicability
1. This Directive applies to issuers of equity securities with primary and secondary listings on MERJ Exchange.
2. The provisions of this Directive must be read alongside the applicable rules for foreign companies where relevant.
See also:
II. BASIS OF CALCULATION AND DISTRIBUTION
Art. 4 Calculation of public ownership
For determining public ownership (free float), the following equity securities are excluded:
1. Those held by the issuer or its subsidiaries.
2. Those held by shareholders or associated persons (as defined in Part 11 of the Securities Act 2007) in amounts exceeding 10%, excluding equity derivatives and securities held temporarily under securities lending or "repo" transactions.
3. Securities used as guarantees for convertible rights and options, unless deemed otherwise under Art. 4(1)(a).
4. Securities subject to lock-up agreements.
5. Securities placed under specific conditions, such as those issued under over-allotment options (e.g., greenshoe options).
See also:
Art. 5 Calculation of capitalization
1. Applicants must calculate the theoretical opening price on the first trading day based on reasonable assumptions.
2. This price will determine the capitalization of equity securities held by the public.
Art. 6 Confirmation of sufficient free float
The appointed Sponsor Advisor or the applicant must confirm that sufficient free float is ensured for the first trading day.
III. FINAL PROVISIONS
Art. 7 Entry into force
This Directive shall enter into force on 1 March 2025
Art. 8 Transitional Provisions
Applications submitted by new issuers after the entry into force of this Directive will be assessed in accordance with its provisions.