Procedures for Equity Securities

Directive Procedures for Equity Securities

I. GENERAL PROVISIONS

Art. 1 Substance

This Directive outlines the procedures for the listing of equity securities on MERJ Exchange and provides the necessary framework for trading equity securities on a separate trading line. It specifies the requirements for planning and executing a listing, including supporting documents and deadlines.

Art. 2 Scope of Applicability

These procedures apply to all primary listings on MERJ Exchange. They include supplementary or modified procedures applicable to foreign issuers, as detailed in the "Directive Foreign Companies."

See also:

- Directive Foreign Companies

II. LISTING

Art. 3 Transactions Requiring Formal Applications

  1. Listing or delisting applications must be submitted for the following transactions:

    1. Initial Public Offerings (IPO);

    2. Listing by introduction (direct listing), except where securities maintain a primary listing on a recognized overseas securities exchange;

    3. Mergers or spin-offs, where a capital increase or IPO results;

    4. Capital increases:

      1. Issued or authorized capital increase; or

      2. Conditional capital increase;

    5. Capital transactions involving currently listed securities (e.g., splits, exchanges);

    6. Listing of an additional category of equity securities;

    7. Change in regulatory standard;

    8. Delisting.

  2. Applications must describe the planned transaction, including timeframes.

See also:

- Rules for Admission of Certain International Securities and Recognized Mutual Funds - Directive Delisting

Art. 4 Timing of Submission of Applications

  1. Initial Public Offerings (IPO) Applications must be submitted at least 20 trading days before the envisaged listing date.

  2. Other Transactions Applications for other transactions must be submitted no later than 15 trading days before the intended listing date.

  3. Capital Increases

    1. Ordinary/Authorized: Applications must be submitted 10 trading days before the corresponding entry in the Commercial Register.

    2. Conditional: Applications must be submitted 10 exchange days before the first possible exercise date of the conditional capital

  4. Book-Building Procedures Applications must be submitted 20 exchange days before the start of the book-building period.

Art. 5 Annexes to Applications

  1. The following annexes must be submitted with the application, depending on the transaction type:

    1. Listing Particulars or an equivalent document, unless exempted under the Listing Rules;

    2. Duly signed issuer declaration pursuant to LR40 or Article 14 of this Directive;

    3. Extract from the Commercial Register or equivalent confirming the authorised and issued outstanding capital;

    4. The documents required in Appendix A and B of the MERJ Group AML-CFT Policy Manual depending on the type of issuer;

    5. Proof of holding rights (e.g., legal text for foreign book-entry or digital asset securities);

    6. Official Notice pursuant to LR32;

    7. Issuer Declaration;

    8. Recognized Representative Declaration.

  2. For new issuers, include a Certificate of Good Standing or comparable document demonstrating the issuer's legal existence.

  3. Documents must be submitted by email to [email protected] with secure digital signatures (e.g. Docusign) or as originals in paper form.

See also:

- Directive Form of Securities

Art. 6 Official Notices

  1. The "Official Notice" must include the following:

    1. Company name, registered office, and address;

    2. Description, nominal amount, number, and denomination of the securities;

    3. Planned listing date (if known);

    4. Summary description of the transaction;

    5. Mention of other securities exchanges where the securities are already listed or where listing has been applied for;

    6. Ticker and ISIN;

    7. Details of where the Listing Particulars and any reference documents and any further reference documents or information may be obtained free of charge;

    8. Statement that the Listing Particulars is the only authoritative source of information on the listing in question;

    9. The regulatory standard under which listing has been applied for;

    10. Contact details for additional information;

    11. Date of publication.

2. The "Official Notice" must be submitted electronically by 8:00 a.m. (UTC+4) on the day prior to publication. It is not a substitute for mandatory publications required under price-sensitive disclosure rules.

Art. 7 Submission of Documents for Specific Transactions

For certain transactions, the following additional annexes apply:

  1. Collective Investment Schemes:

    1. A copy of the license or decision of approval by the regulator.

    2. Signed market-making agreement, if applicable.

  2. Investment Companies:

    1. Rules for investment policy.

  3. Young Companies:

    1. Drafts of contractual lock-up agreements.

    2. Final signed agreements three exchange days before the first trading day.

See also:

- Directive Form of Securities

III. SPECIAL PROCEDURES FOR CAPITAL INCREASES AND DELISTINGS

Art. 8 Ordinary or Authorized Capital Increase

  1. Application Requirements The application for an ordinary or authorized capital increase must include:

    1. A summary of the transaction, including the ISIN and ticker of the subscription rights.

    2. Details of the subscription ratio, subscription price, and duration of the subscription period.

  2. Trading of Subscription Rights

    1. Subscription rights may be traded on MERJ Exchange if explicitly requested in the listing application.

    2. An "Official Notice" must be published on the first trading day of the subscription rights, detailing:

      1. Number of subscription rights.

      2. Subscription ratio.

      3. Subscription price.

      4. Duration of the subscription period.

  3. Unestablished Equity Securities

    1. If rights are to be traded prior to the entry of the new shares in the Commercial Register, these rights must comply with "if and when issued" trading rules.

    2. A guarantee from the lead underwriter (Letter of Indemnification) must be provided for such trades.

  4. Equivalency New equity securities will only achieve equivalency with existing listed securities after formal entry in the Commercial Register, which must be publicly announced in advance.

Art. 9 Conditional Capital Increase

  1. Reporting Obligations

    The issuer must submit monthly reports from the date of listing until the first possible exercise of the conditional capital. These reports should detail:

    1. Total outstanding securities.

    2. Number of exercised securities.

    3. Remaining conditional capital.

  2. Negative Confirmation If no exercise is expected for an extended period, the issuer may request exemption from monthly reporting by submitting a single negative confirmation. This exemption is valid for up to one year.

  3. Retroactive Applications If equity securities are exercised and entered into the Commercial Register without prior listing, the issuer is required to submit a retroactive listing application immediately.

See also:

- Directive Form of Securities

Art. 10 Delisting

  1. Application Requirements

    1. Detailed reasons for delisting.

    2. Arrangements for settlement or transfer of securities post-delisting.

  2. Mandatory Disclosures An "Official Notice" must be published at least 10 trading days before the last trading day and include:

    1. Final trading date.

    2. Explanation of the delisting's rationale.

    3. Contact details for inquiries.

  3. Investor Protection Measures MERJ Exchange reserves the right to impose additional conditions, such as extended trading periods or mandatory buyback offers, to safeguard investors.

See also:

- Directive Delisting

IV. SPECIAL PROCEDURES FOR TRADING SECURITIES ON A SEPARATE TRADING LINE

Art. 11 Definition

A separate trading line ("second line") refers to an additional order book with a unique ISIN, opened in parallel to an existing security to accommodate specific trading conditions.

Art. 12 Principle

  1. Approval Criteria Separate trading lines may be authorized for:

    1. Rights issues;

    2. Securities with special restrictions or designations (e.g., restricted transferability);

    3. Securities requiring distinct identifiers for settlement in specific markets.

  2. Application Requirements Applications must include:

    1. Purpose and rationale for the separate trading line;

    2. Proposed ISIN and ticker;

    3. Duration of the trading line's operation.

Art. 13 Opening a Separate Trading Line

The Listing Committee will approve the opening of a separate trading line upon review of the application and verification of compliance with trading rules and settlement processes.

Art. 14 Issuer Declaration

The issuer must provide a written declaration confirming:

  1. That all arrangements for settlement and clearing of the separate trading line comply with MERJ Exchange rules;

  2. Full disclosure of any material facts relevant to the separate trading line.

Art. 15 Disclosure Obligations for Separate Trading Lines

  1. At Inception An "Official Notice" must be published prior to the start of trading on the separate line, detailing:

    1. Purpose of the separate trading line;

    2. ISIN, ticker, and settlement details;

    3. Trading commencement date.

  2. Ongoing Updates Issuers must notify MERJ Exchange immediately of any changes affecting the separate trading line.

Art. 16 Cancellation of Separate Trading Lines

  1. Notification Requirements An "Official Notice" must be issued at least 5 trading days before cancellation, detailing:

    1. Reason for cancellation;

    2. Effective cancellation date.

  2. Investor Provisions Arrangements for the settlement or transfer of securities must be confirmed prior to cancellation.

V. FINAL PROVISIONS

Art. 17 Entry Into Force

This Directive shall enter into force on 1 March 2025.

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