In order to be traded on the ISE markets, the stocks of a company should be registered with the CMB, offered to public and listed on/registered with the ISE markets.
ISE listing/market registration means that the stocks which are required to be continually traded on the securities exchanges can be traded on the respective market provided that they meet the respective terms.
Preliminary works a company has to conduct prior to application to ISE and CMB:
Creating an In-house Working Group
Since there is a set of transactions which a company has to complete inside and outside the Company in relation to public offering and listing, a working group has to be set up. This working group should be comprised of medium-level executives, finance department employees and public relations employees. The working group should make a list of tasks to be completed prior to application to ISE and CMB.
Selection of Intermediary Institutions
For the public offering of stocks, a brokerage agreement should be executed with an intermediary institution. The parties to that agreement are the company and the intermediary institutions authorized by CMB, and the list of intermediary institutions authorized to undertake a public offering are available on the website of the Capital Markets Board. The brokerage agreement may be executed with a single intermediary institution or a syndicate established by more than one intermediary institution as the amount of public offering raises. In that case, there shall be one or more than one lead underwriters. The agreement to be executed should state the responsibilities of the intermediaries and the companies, whether there shall be an underwriting obligation or not, how underwriting shall take place, which method shall be used in public offering, and other issues of essence.
Intermediary institutions intermediate to the public offering using any one of the public offering methods below.
- Best Effort Underwriting
- Underwriting
- Stand-by Underwriting
- Full Underwriting
Preparation of Financial Statements and Selection of an Independent Audit Firm
Companies applying for a public offering have to get their financial statements drawn up in accordance with the Capital Market legislation and inspected them by an independent authorized audit firm. In this context, companies should choose an independent audit firm authorized by the CMB, and sign an audit agreement.
General Assembly Decision and Amendment of Articles of Association
A company that decides to be publicly traded prepares draft amendments to amend its articles of association in accordance with the capital market legislation and presents them to the CMB. If the articles of association contain provisions restricting the transfer and circulation of the stocks to be traded on the stock exchange or preventing the exercise of shareholder rights, such provisions should be cancelled, and also other provisions of the articles of association should be adapted to the capital markets legislation. If public offering is to be carried out through a capital increase, the general assembly takes decision to increase the capital and to restrict the right to buy new shares in accordance with the provisions of Turkish Commercial Code
Price Determination Determination of the issue price is one of the most important steps of the public offering process, and depends on both the company-specific developments and circumstances beyond the company’s control. A realistic determination of the issue price is instrumental to a successful public offering as well as to the good performance of the stock after listing in the ISE. The issue price of company's stock is generally calculated by the underwriter and is free of any intervention by the ISE and CMB. Principles governing the determination of stock price are included in the public offering prospectus.
Preparation of Documents Required for Application
The company and/or the underwriter starts conversations with the Exchange and CMB authorities in the first stages of the issue, and obtains information about the required documents and procedures. Necessary application documents are regulated under Article 9 of the ISE Listing Regulation, and even if they are prepared in a general format, they may vary depending on the company and its sector, and different documents may be required during the inspections conducted at the company. The documents should be delivered with seals and signatures affixed.