Draft new instructions allow trading unlisted securities on Amman Bourse

AMMAN — The Jordan Securities Commission (JSC) has prepared draft new instructions that allow trading unlisted securities on the Amman Stock Exchange (ASE).

The listing instructions to the stock exchange have been amended in accordance with the new draft, prepared in cooperation with the ASE and the Securities Depository Centre (SDC), and the instructions to issue and register securities have been amended as well.

Under the draft, a special market to trade securities unlisted on the ASE will be established, JSC Chief Commissioner Mohammad Hourani said.

He added that all shares of public shareholding companies registered at the JSC and  SDC and not listed or traded at the ASE can be traded in this market, stressing that the companies will still be committed to disclose financial statements in accordance with the law.

Establishing this market will provide an opportunity for shareholders of companies whose listings were annulled or whose share trading was suspended to sell their shares through brokerages based on market supply and demand.

Also, investors will be able to buy the shares of these companies because, at present, such transactions whether buying or selling are not allowed, Hourani continued, noting that the trading in this market will be separated from that of the ASE-listed securities and will not affect the index calculated by the bourse.

The amendment aims at having the company, officially listed on the stock exchange, to be financially sound with high-level disclosure, in accordance with international practices, which  companies have to achieve in order to have the privileges of being listed in a licensed financial market. 

According the amendment, “the third market will be cancelled after a whole year elapses from the date the new amendments are implemented”, and then the situation of companies listed in the market will be reviewed.

When that happens, companies that will have achieved the conditions of being listed in the ASE will be moved to the second market and the rest will be unlisted and the trading of their stocks will be moved to the newly-established special market.

The draft includes reconsidering the measures taken against companies that do not disclose annual financial statements during the period set according to the law as to suspend their stocks on the same day of the deadline to issue the statements until they issue them, according to Hourani.

The draft will allow listing and trading the stocks of private shareholding companies and corporate bonds issued by them in accordance with the Companies Law, which views stocks and bonds issued by a private shareholding company as securities that a company may want listed and traded in the market, he said.

The amendments can add new securities to the market to increase its liquidity and those investing in it, Hourani added, noting that there are around 1,000 private shareholding companies registered at the Companies Control Department.

Moreover, he said the recommendations were put on the JSC's website and were distributed to all the concerned parties interested in expressing their opinion towards suggested amendments in order to take them into consideration before issuing the final draft of the new instructions.