Conditions are being created for them to be on the exchange list

The government is looking for ways to stimulate trading in securities of public joint stock companies. Deputies were asked to establish the obligation of issuers to be on the stock exchange list of at least one stock exchange. At the same time, to do this, you don’t even need to carry out transactions with shares; it is enough for traders to regularly post purchase and sale quotes.

All public joint stock companies (PJSC) will be required to appoint corporate secretaries who will be responsible for the company's interaction with their shareholders and potential investors. This provision is provided for in bill N2037, by which the Cabinet of Ministers proposed to improve the work of joint-stock companies on the stock market. Currently, the law “On Joint Stock Companies” only provides for the obligation of PJSCs to enter the exchange list, which allows for exchange transactions with their shares. The bill proposes to oblige PJSC not only to “include shares in the exchange list,” but also to “remain on it at least on one of the exchanges.”

This rule will eliminate the conflict that has arisen in the market. Now, after the issuer’s securities are admitted to trading, nothing happens, and transactions with them are not carried out, so after 60 days the exchange removes them from the list. After which issuers go through the procedure of admission to trading again. Ten stock exchanges have licenses for organizing securities trading. According to the National Commission on Securities and the Stock Market, at the end of September 2012 there were 2,864 PJSCs. Another 8,460 open joint-stock companies must change their organizational form to PJSC or private joint-stock company. All PJSCs are required to be on the exchange list.

Oksana Paraskeva, a member of the trading committee of the Stock Partnership association, believes that with the adoption of the bill, issuers will actually be forced to organize trading in their own securities in order to comply with the law. “Everyone understands that at first the trading will be negotiable. Perhaps then someone will get the hang of it and the securities will trade normally,” says Ms. Paraskeva. This will put a lot of work into the traders (there are currently 685 of them), who are the only ones who have the right to enter into transactions on the stock exchange.

However, even such transactions may not be necessary. Chairman of the Board of the Ukrainian Exchange Oleg Tkachenko recalled that since January 9, the wording of “exchange trading” has changed in the regulation “On the functioning of stock exchanges”. If earlier they meant “concluding agreements with securities,” now they mean “organized submission of bids by trading participants for the purchase and sale of securities.”

If issuers cannot comply with the requirements of the law, then conflicts with the regulator cannot be ruled out. “The issuers will prove in any court that they were included in the list, but the exchange excluded them from it. Once again they were included, but we were excluded again! And they are right,” said Igor Kogut, director of AMC Finex-Capital.

Nikolay Maksimchuk

Issuers will be brought to the public