LISTING AGREEMENT

Abstract

The prime objective of admission of securities to dealings on the stock exchange is to provide liquidity and marketability and also to provide a mechanism for effective management of trading. Thus, listing is the admission of securities to dealings on a recognized stock exchange. For a company to be listed on a stock exchange, the company has to enter into a listing agreement with the respective stock exchange(s). Listing agreement provides conditions to be complied with including the norms for better corporate governance. Listing agreement also work as a link between company and investor because it requires the company to provide basic information to the shareholder and grievance redressal mechanism. In addition, a company intending to have its share listed has to comply with the listing requirements prescribed by the stock exchange. A company seeking listing of their securities on the stock exchange is required to enter into a formal listing agreement with the stock exchange. The listing agreement specifies all the quantitative and qualitative requirements to be continuously complied with by the issuer for continued listing. The stock exchange monitors such compliance and companies who do not comply with the provisions of lisitng agreement may be suspended from trading on the stock exchange. The listing agreement is being increasingly used a means to improve corporate governance.