MSE listed Current vs proposed framework Public issue Equity Debt - - PowerPoint PPT Presentation

Public companies [public offers] Prospectus published MSE listed Public disclosures [up to maturity of instrument]

MSE listed

Private companies [private placments] Information memorandum to investors MSE listed (private segment) Continuous disclosures to investor

More detail about types of securities Issuers Regulation Flexibility for management account Issuers regulations LR changes Disclosures based

• n the TYPE of

security CDOI, MQRR

• Current vs proposed framework
• Public issue
• Equity
• Debt
• Securitization
• Fund
• Listed private placements
• No Equity
• Debt
• Securitization
• Fund unit
• Non listed private placements
• Not applicable

• An offer document is required regardless of the type of securities
• Assets and liabilities
• Material risks associated
• Rights and obligations of issuers/subscribers
• Expert opinion
• Should have consent to include in the prospectus
• Financial statements rules

• Financial Statements Rules
• Cases of less than 2 years of business
• FS for the whole period, not older than 3 months from the offer date; and
• Directors declaration
• Cases of more than 2 years of business
• If without management accounts
• FS not older than six months
• Directors declaration
• If with management accounts
• Private offers
• Management accounts not older than 3 months
• FS not older than 12 months
• Directors declaration
• Public offers
• Management accounts not older than 3 months
• FS not older than 9 months
• Directors declaration

• Financial Statements Rules
• Additional rules for acquisition/merger
• FS of target company not older than six months
• Directors declaration
• Directors declaration
• Must be given stating that –
• That the business have been properly maintained and that there are no events that make

significant changes to the business

• Declaration should not be older than 14 days from the date of the offer

• Allotments
• To be made only if the stated amounts have been subscribed for
• Otherwise to be returned

• Rules for
• Equity
• Debt
• Securitized instrument
• Fund units

Equity Public offers Private placements Offer may be accepted by any person of the public Not public offer Limited to 50 persons per offer Equity >By a public company >Or an entity registered as a Fund >For companies, requirements of Companies Act NA CDOI >CDOI disclosure to public >Immediate disclosure of certain events >Immediate disclosure of certain decisions of the Board >Quarterly reports within 30 days NA CDOI >Acquisition or disposal of assets >Certain events require prior notification >Immediate (dividends, buybacks, new issues, financial results) NA

Debentures Public offers Private placements Debentures >By a public company >As per the Companies Act Restrictions on share transfers for promoters of issuer >A company registered in Maldives >Last 2 consecutive years operations >Pre issue interest cover of 150% >Pre issue asset cover of 100% >Net assets >= 5 millions >Independent audit function [Maintain these requirements] >No distribution that make asset cover fall below 150% *If subsidiary issuer; 2 years apply to parent only *Above doesn’t apply, if guaranteed by GOM Limit on transfer of shares by promoters of issuer Security >Collateral; 50% or none; guarantee >If secured, tangible assets

• nly

>Assets must be insured >Collateral; 50% or none; guarantee >If secured, tangible assets only >Assets must be insured

Debentures… Public offers Private placements Cont.… CDOI >CDOI disclosure to public >Company performance,

• r price sensitive

information >Guarantor disclosures >Quarterly reports within 30 days >Other disclosures primarily related to performance of the company, and price sensitive in relation to debt securities >CDOI disclosure to investors >Company performance, or price sensitive information >CDOI required for guarantor? >Quarterly reports within 30 days >Other disclosures primarily related to performance of the company, and price sensitive in relation to debt securities

Securitization Public offers Private placements Securitization and Sukuk >Public company registered in Maldives >Originator – a company registered in Maldives except GOM >Chapter 5 specific requirements on securitized asset >Additional specific requirements in case

• f sukuk

>Restrictions on transfer of shares by promoters of issuer >Restrictions on the SPV >An entity registered in Maldives >Originator – a company registered in Maldives; except if Government >Originator – profit in last two consecutive years; pre issue interest cover of 150%; pre issue asset cover of 100%; independent audit function >No distribution that make asset cover fall below 150% >Maintain these requirements >Originator exempt if credit guarantee by GOM >Chapter 5 requirements; sukuk requirements >Restrictions on transfer of shares by promoters

• f issuer

>Restrictions on the SPV

Securitization Public offers Private placements Cont.…. CDOI >Public disclosure >Specific disclosures on the securitized asset >Specific disclosures in case of sukuk >Quarterly reports of issuer >Quarterly reports (reduced) of originator >Disclosures primarily related to issuer and guarantor performance and the type of security issued >As per CDOI, >Specific disclosures on the securitized asset >Specific disclosures in case of sukuk >Quarterly reports of issuer >Quarterly reports (reduced) of originator >Disclosures primarily related to issuer and guarantor performance and the type of security issued

Fund’s units Public offers Private placements Fund units >As per Fund’s regulations; which says >Public company or LLP with more than 10 sponsor partners >Manager – licensed person >Restrictions on investment policy >Custodian required >Restrictions on transfer of shares by promoters of issuer >A company or LLP >Manager should be a company registered in Maldives >Manager – profit in last two consecutive years; independent audit function >Restrictions on transfer of shares by promoters of issuer CDOI >Public disclosure >Disclosures as in Fund’s regulations >Quarterly reports within 30 days >Disclosures linked to fund regulation – primarily related to performance of the fund >As per CDOI >To specific investor groups >Quarterly reports within 30 days >Disclosures linked to fund regulation – primarily related to performance of the fund

• Continuing disclosures divided into chapters that apply to –
• Generally to all types of securities
• Specifically for the particular type of securities
• General
• General obligations to disclosure anything that may have a significant impact
• n the performance of the securities
• Exemptions given, for e.g. trade secrets, illegality, incomplete information etc.
• Disposal of assets
• Compliance officer
• Specific

• Specific
• Equity
• Financial results – quarterly and annual totals
• Within 30 days
• Approved and signed by Board
• Annual audited results
• Within 4 months
• AGM
• Within 5 months
• Records dates have to set and informed for all corporate decisions
• Certain documents/information to be put in the website
• Statement of use of funds

• Specific
• Debt
• Applies in case only debts are listed
• Requires notification about new issue of debt securities
• And any information that may impact the price of debt security
• And financial results
• Quarterly and annual totals within 30 days
• Audited financials and annual report within 4 months
• Asset cover, ratings to be maintained
• Record dates for corporate actions involving debt

• Specific
• Debt
• Certain contents for the website
• Securitized instruments
• Applies to originators and issuers
• Units of funds
• Applies to fund vehicle and manager

• Land law limitations on mortgages involving land and buildings
• Mortgaging third party assets
• E.g. of Directors
• Mortgaging assets
• By Board resolution; by contracts?
• Power to sell in case of default or liquidation
• Who can enforce?
• Is board resolution sufficient for a court to enforce?
• Registration of documents in Court?
• How to enforce in case of default
• Guarantor disclosures
• Disclosures about the asset

• Public offers and listed
• Transfers through the Exchange transactions
• Non exchange
• Between family members
• If court approved
• To charities
• Company restructuring
• Bulk sales
• If more than 5% of the issued shares, by way of public offer
• Or privately, if an order placed in the Exchange and didn’t match
• Sale to or purchase from a dealing company
• Private placed securities – if not listed elsewhere
• Off market to any person

• For public offers
• Quarterly and annual unaudited financial within 30 days
• Signed by CFO, chair of audit committee and one director
• Audited financial statements within 4 months
• Public disclosure within 5 months (for equity)
• Private offers
• Quarterly and annual unaudited financial within 30 days
• Signed by CFO, chair of audit committee and one director
• Audited financial statements within 4 months

• Prior notification of meetings
• Equity:
• financial results
• buyback of securities;
• voluntary delisting
• further public offer, rights issue, debt issue, preferential issue or any other method and

for determination of issue price

• declaration/recommendation of dividend, issue of convertible securities
• Bonus issue
• Any alteration in the rights or privileges of the holders of listed securities
• Debt and sukuk
• Issuing new similar instrument

• Timely disclosures
• Schedule