Borsa Istanbul ("BIST") made amendments in the market structure of the equity market, trading principles, transfers between markets and listing criteria effective from 1 October 2020.
Significant amendments are the following:
New Market Structure
- The distinction between BIST Star Group 1 and Group 2 was removed, both were merged under BIST Star.
- BIST Main Group 1 was renamed as BIST Main.
- BIST Main Group 2 and Emerging Companies Market were merged under BIST SubMarket.
New Trading Criteria and Listing Requirements
New trading criteria for relevant markets are revised as follows:
|
Criteria for Trading in Market Segments |
BIST STAR |
BIST MAIN |
|
Market Cap |
) TRY 500 million |
)TRY 60 million |
|
Market Cap of Shares in Actual Free Float |
) TRY 100 million |
) TRY 30 million |
|
Free Float Ratio (FFR) |
) 10% |
) 10% |
|
Number of Domestic Individual Investors |
) 1000 |
) 500 |
|
Privileges |
Privileges only allowed if FFR ( 90% |
Privileges only allowed if FFR ( 90% |
|
Domestic Funds |
) TRY 3 million |
|
|
Liquidity |
( 2.5 |
( 7.5 |
|
Exemption from other criteria (*) |
AFF ) TRY 750 million and liquidity ( 2.5 |
Dividend ) 10% and AFF ) TRY 30 million |
As a general principle, each share must fulfil the criteria of the market and the group it is classified in; however, two exceptions are foreseen for this principle.
* If a company's market cap of shares in actual free float exceeds TRY 100 million and its liquidity is higher than 2.5, such company will be listed in BIST Star regardless of fulfilling other criteria.
* If a company is traded in BIST SubMarket and its market cap of shares in actual free float exceeds TRY 30 million and its dividend return exceeds 10%, such company will be listed in BIST Main regardless of fulfilling other criteria.
Listing requirements for BIST Star, BIST Main and BIST SubMarket were also amended as follows:
|
Listing Criteria |
BIST STAR |
BIST MAIN |
BIST SUBMARKET |
|
Free-Float Market Value |
) TRY 200 million |
) TRY 50 million |
) TRY 20 million |
|
Existence of Net Income in the Last Independently Audited Annual Financials |
15% |
20% |
25% |
|
Free-float Percentage of Nominal Value of Shares Offered to Public to Capital |
Last 2 years |
Last 2 years |
Last 2 years |
|
Equity / Capital Ratio Present in the Latest Independently Audited Financial Tables |
)1.0 |
)1.0 |
)1.25 |
*Requirements of an extraordinary listing application for BIST Star were also amended, which applies in cases where requirements for "Existence of Net Income in the Last Independently Audited Annual Financials" and "Equity / Capital Ratio Present in the Latest Independently Audited Financial Tables" cannot be met. If the equity is negative, market value of publicly offered shares must amount to TRY 1 billion at minimum for being listed on BIST Star.
Restrictions in Privileged Shares
Notwithstanding the abovementioned exemptions, if a company's free float ratio exceeds 90% in BIST Star or BIST Main, share groups granting privileges will not be allowed.
Minimum Market Cap
Minimum market cap for a listing on BIST Star was raised to TRY 200 million with a TRY 50 million increase. Minimum market cap for a listing on BIST Main remained as TRY 50 million. Lastly, minimum market cap for BIST SubMarket is determined as TRY 20 million.
Minimum Free-Float Rate
Companies with a free float ratio below 5% will not be allowed to trade on either BIST Star, BIST Main or BIST SubMarket. Such companies will be traded on Pre-Market Trading Platform. Existing companies listed on BIST Star or BIST Main were granted a grace period until 1 January 2021 to increase their free float ratio above 5% or acknowledge to be traded on the Pre-Market Trading Platform after this date.
New Trading Principles
BIST's trading principles were also updated. However, short-selling prohibition except for BIST-30 shares and circuit breaker system for individual shares are still in force and these practices will continue for the time being.
New Risk Information Text for BIST SubMarket
BIST also published a message text to be communicated to investors intending to invest in BIST SubMarket informing them of the volatility of the market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.