• Chapter 7 Chapter 7 Listing and Dealing

    • 1. Methods of Listing

      Subject to Articles (139), (142), (143) and (149) of the Commercial Companies Law, Debt Securities may be brought to listing by any one of the following methods described below:

      1.1 Direct Offering (Without Underwriting):
      1.1.1 Direct offering is an offer to the public by or on behalf of an issuer of its own Debt Securities for subscription.
      1.1.2 The subscription of the Debt Securities need not be underwritten, provided that full disclosure to that effect is made and the minimum nominal amount of Debt Securities is actually issued.
      1.1.3 In the case of offers by tender, the Agency must be satisfied as to the fairness of the basis of allotment so that every investor who applies at the same price for the same number of Debt Securities receives equal treatment.
      1.1.4 An offer for subscription must be supported by a listing document which must comply with the relevant requirements of the Exchange.
      1.2 Offering Through an Intermediary (Primary Dealer):
      1.2.1 An offering through an intermediary is an offer to the public by an intermediary (a primary dealer(s)) of Debt Securities already in issue or agreed to be subscribed.
      1.2.2 In the case of offers by tender, the Agency must be satisfied as to the fairness of the basis of allotment so that every investor who applies at the same price for the same number of Debt Securities receives equal treatment.
      1.2.3 An offering through an intermediary must be supported by a listing document which must comply with the relevant requirements of the Exchange.
      1.3 Private Placement:
      1.3.1 A placing is the obtaining of subscriptions for Debt Securities by an issuer or intermediary from persons selected or approved by the issuer or intermediary.
      1.3.2 The Agency must be satisfied that the placing arrangements will ensure an open market in the Debt Securities after listing has been granted by the Exchange. This will usually mean that at least two issuing houses which normally make markets (by quoting both offer and bid prices) in the relevant type of Debt Security must be involved in the placing. These need not be members of the management or selling group, but must be independent of each other and at least one must be independent of the issuer.
      1.3.3 A placing must be supported by a listing document which must comply with the relevant requirements of the Exchange.
      1.4 Substitution and Conversion:
      1.4.1 Debt Securities may be brought to listing by an exchange or a substitution of Debt Securities for, or a conversion of, Debt Securities into other classes of securities.
      1.4.2 An exchange, substitution or conversion of Debt Securities must be effected in accordance with the terms and conditions of the Debt Securities to be exchanged, substituted or converted or otherwise with the consent of all the holders of such securities.
      1.4.3 An exchange or a substitution of Debt Securities must be supported by a listing document in the form of a circular to holders of the Debt Securities concerned which must comply with the relevant requirements of the Exchange.
      1.4.4 Such other methods as the Agency may from time-to-time approve:

    • 2. Listing Document

      A listing document is defined as a prospectus, a circular and any equivalent document (including a scheme of arrangement and introduction document) issued or proposed to be issued in connection with an application for listing. Issuers are recommended to consult the Agency at the earliest opportunity if they are in any doubt as to whether a particular document constitutes a listing document as so defined.

    • 3. Listing Agreement

      3.1 A Listing Agreement has to be signed between the issuer of Debt Securities and the Exchange before the listing date and the commencement of trading in the Debt Securities.
      3.2 One of the principal objects of the Listing Agreement is to secure the immediate release of information which might be reasonably expected to have a significant effect on the ability of the issuer to meet its commitments. As will be clear from the terms of the Listing Agreement and related notes, the guiding principle is that information which is expected to be price-sensitive should be released immediately it is the subject of a decision. Until that point is reached, it is imperative that the strictest security within the issuer and its advisers is observed.
      3.3 Strict compliance with the terms of the Listing Agreement is essential to the maintenance of a fair and orderly securities market and helps to ensure that all users of the market have simultaneous access to the same information. By following its provisions, the issuer should ensure that dealings do not take place between parties, one of whom does not have price-sensitive information which is in the possession of the other. It would be clearly damaging to an issuer's relationship with the holders of its listed Debt Securities and the Agency, if there is an apparent unreadiness to disclose information at the proper time.
      3.4 In order to maintain high standards of disclosure, the Agency may require the publication of further information by and impose additional requirements on a existing listed issuer where it considers that circumstances so justify, but will allow representations by the issuer before imposing any such requirements on it which are not imposed on existing listed issuers generally. The issuer must comply with such requirements and, if it fails to do so, the Agency may (where such requirements relate to the publication of information) itself publish the information.
      3.5 Issuers must understand that the Listing Agreement creates binding obligations on the issuer and that failure to comply with the terms of the Listing Agreement or any such requirement for further information as is mentioned above may lead to the suspension of dealings in or cancellation of the listing of their Debt Securities.
      3.6 The Exchange may from time-to-time in its absolute discretion revise the terms of the Listing Agreement and related notes generally, subject to the approval of the Agency. Such revisions will be communicated to issuers who will be expected to comply with them and may be required to enter into a new Listing Agreement in the revised form by way of confirmation.
      3.7 The Exchange is available to all existing listed issuers and new applicants to help and advise in the strictest confidence on the interpretation of the Listing Agreement.
      3.8 References in the Listing Agreement to informing the Exchange mean delivery of the relevant information to the Exchange in the manner determined by the Exchange from time-to-time and promulgated by way of a practice note to the Exchange's listing requirements.

    • 4. Listing of Convertible Debt Securities

      4.1 Without subject to the generality of Article (149) of the Commercial Companies Law, Convertible Debt Securities which are convertible into equity securities may be listed only if such equity securities are (or will become at the same time):—
      (a) a class of listed equity securities; or
      (b) a class of equity securities listed or dealt in on another regulated stock market recognised by the Agency.
      However, the Exchange may list Convertible Debt Securities in other circumstances if it is satisfied that holders have the necessary information available to form an opinion concerning the value of the underlying equity securities to which such Convertible Debt Securities relate. This principle does not apply to an issue of Convertible Debt Securities by a State or a Supranational.
      4.2 Convertible Debt Securities which are convertible into property, other than equity securities, may be listed only if the Agency and the Exchange is satisfied that holders have the necessary information available to form an opinion concerning the value of the other property to which such convertible Debt Securities relate. This principle does not apply to an issue of convertible Debt Securities by a State or a Supranational.
      4.3 Any alterations in the terms of Convertible Debt Securities after issue must be approved by the Agency, except where the alterations take effect automatically under the existing terms of such Convertible Debt Securities mentioned in the offering document.
      4.4 Where application is made by an issuer for listing of a tap issue, the Agency and the Exchange will normally apply the same requirements for each subsequent tranche as would apply to the initial tranche. However, where such an application is contemplated, the Agency should be consulted at the earliest opportunity as to the requirements which will apply.

    • 5. Listing of Private Placement of Debt Securities

      Pursuant to Article (142) of the Commercial Companies Law, it must be made clear in the listing document that the issue may be cancelled at any time up to the time when subscription monies are received and the Debt Securities issued (the "closing date"), and that listing is, therefore, conditional in this respect. It is recommended that subscription agreements should include wording making the obligations thereunder conditional upon the Debt Securities being listed on or before the closing date.

    • 6. Modification to Listing Agreement

      6.1 The Exchange may be prepared to agree modifications to the Listing Agreement as it considers appropriate in a particular case. In particular, in the case of an overseas issuer whose primary listing is on another regulated stock market recognised by the Agency, the Exchange may accept a Listing Agreement which incorporates equivalent continuing obligations to those imposed by that other stock market.
      6.2 Conversely, the Exchange may impose additional requirements in a particular case. In particular, if the overseas issuer's equity capital has or is to have a primary listing on the Exchange, the Exchange may impose such additional requirements as it considers necessary to ensure that investors have the same protection as that afforded to them in Bahrain.
      6.3 In addition, the Exchange may grant some exemptions in a particular case in accordance with the nature of the Debt Securities, in particular, with regards to private placement.

    • 7. Standard Criteria for Listing Debt Securities

      Any issuer applying to list Debt Securities on the Bahrain Stock Exchange must comply with the requirements as stipulated in these Guidelines:

      7.1 The issuer must comply with all the provisions of the Commercial Companies Law, in the case of Bahraini issuers and with the relevant legislation in the case of issuers established outside Bahrain.
      7.2 The issuer must comply with the provisions of its Memorandum and Articles of Association or equivalent documents (if applicable).
      7.3 The Debt Securities issuer must obtain the Agency's approval prior to listing.
      7.4 A minimum period of 2 years should have elapsed since the incorporation or establishment of the issuer (if applicable).
      7.5 The issuer's issued capital should be fully paid-up (if applicable).
      7.6 The issuer must appoint a representative office in Bahrain to register the Debt Securities, distribute payment of interest or income, distribute reports and undertake other relevant matters.
      7.7 The issuer shall publish its balance sheet and the results of its operations for each financial year in at least two local newspapers during the term of the investment (if applicable).
      7.8 The issuer shall comply with the provisions of the Listing Agreement signed with the Exchange.

    • 8. Other Listing Requirements

      8.1 In order to be listed on the Exchange, Debt Securities to be issued should be at par value, indivisible, fully transferable, and for public issues, it would need to be offered to the public by means of a prospectus published in at least 2 local newspapers, or otherwise by means of a profile statement.
      8.2 Debt Securities shall not be listed on the Exchange unless registered in the name of their holders (i.e. Debt Securities should only be issued in a registered form).
      8.3 The application shall be accompanied by the proposed timetable for the different phases of issuing, flotation, listing and dealing in Debt Securities as approved by the Agency.
      8.4 Documents to be attached with the application:
      8.4.1 The list of documents, statements and information required for listing the Debt Securities on the Exchange shall be submitted at least 5 working days before the date fixed for commencement of dealing in Debt Securities on the Exchange, accompanied by:
      (a) Final copies of the documents and statements;
      (b) A cheque in favour of the Bahrain Stock Exchange for the amount of the initial and annual listing fees.
      8.5 The Listing Agreement shall be signed between the Exchange and the issuer before the commencement of dealing in Debt Securities on the Exchange.
      8.6 All offering and listing documents relating to Debt Securities for which listing is sought must contain the following framed statement on the front cover page and written in capital letters:

      "THE BAHRAIN MONETARY AGENCY AND THE BAHRAIN STOCK EXCHANGE DOES NOT ASSUME ANY RESPONSIBILITY AS TO THE ACCURACY OR ADEQUACY OF THE STATEMENTS AND INFORMATION INCLUDED IN THIS DOCUMENT OR ANY LIABILITY OR DAMAGE OR LOSS ARISING AS A RESULT OF RELYING OR ACTING ON THE BASIS OF ANY OF THE STATEMENTS AND INFORMATION INCLUDED IN THIS DOCUMENT."