Transaction Procedures at the Stock Exchange Market

Securities Quoted On the Stock Exchange Market
The issuing companies of negotiable securities must fulfill a series of requisites and to contribute with the documentation required by the actual legislation if they pretend their admission to the secondary security market.

Requirements to be Admitted For Quotation
The admission procedures can vary according to the existence or not of previous verifications from the regulating organism of the stock exchange market, and if the securities are foreign or from the country, public or private, traded on the first or secondary market, etc.

Attending to the possibility of a previous verification from part of the regulating organism (the securities & exchange commission, sec, in the case of the NYSE, the securities & investment board, in the case of London, etc.) the requisites to be admitted for quoting are the following:

With Previous Verification
The admission to negotiate national or foreign securities of variable or fixed interests, and warrants, with the previous verification of the regulating organism of the stock exchange market is required by: private or public institutions that are ruled by the private legal order.

In general terms, for the shares or debentures to be admitted for trading at the official market, it is necessary for the issuing company to have a minimum nominal capital, a minimum number of shareholders and that in the last past years they have obtained a determined percentage of profits on the pay out capital.

The obligation of these requirements is to urge that the securities admitted for quotation have liquidity and that they offer the maximum guarantees to the potential investors.

Also, after obtaining the admission for quotation, the securities in question has to have a minimum frequency of trading (measured against the percentage of market sessions of each semester, for example) and a minimum volume of negotiation (measured fro the percentage of the volume of nominal negotiation fro the total of securities of the same nature).

To accede to the secondary market, the conditions are similar but the minimum requirements are less, this with the finality of being more accessible for those small and medium companies.

Once they fulfill the requirements, the given documentation included on a file of admission for negotiation) will contain the following information:

Previous communication directed to the supervising organism of the stock exchange market.

The corresponding certificates of: emission and admission company agreements, lawsuits and legal reductions, holders of the securities, etc.

Notary’s testimonies of the public deeds of constitution, expansion of the capital, fixed interest emission, proxies, etc.

  • Actualized statutes.
  • Audited accounts from the last two previous accounting periods and actualized financial information.
  • Significant participations superior to 5% and of the directors.
  • Diffusion charts in the cases of subscription or of the placing of the securities.
  • Admission pamphlet adjusted to the corresponding model.

Without Previous Verification
Admission according to the petition of the issuer: In this procedure we find the national securities issued by the different states, official organisms and autonomous governments, etc. from which the issuing country is member (example: in the case of international bonds or debentures: samurai bonds, matador bonds, etc.) Although not needing of a previous verification from the regulating organism of the stock exchange market, it does require of the contribution of certain documentation.

Officially admitted: is the case of securities issued by the government: government bonds and debentures, treasury bills, etc. and the debts issued by other administrations and public organisms. They are admitted automatically once published the emissions on the corresponding bulletin.