Listing Gets Easier at Tehran Stock Exchange

EghtesadOnline: Tehran’s stock market is gearing up for one of its busiest initial public offering in the weeks to come as a flurry of companies are expected to go public following attractive measures announced by the regulator.

News ID: ۷۵۰۳۵۵

01 July 2020

On Tuesday, a memorandum of understanding was signed by private sector representatives and stock market authorities to create a ‘Single Window’ to facilitate listing of private companies.

The MoU was signed during a meeting of the Government-Private Sector Dialogue Council and attended by business leaders, government officials and lawmakers to discuss economic issues.

Signatories included CEOs of Tehran Stock Exchange, Iran Fara Bourse, Iranian Association of Certified Accountants and Iran Chamber of Commerce, Industries, Mines and Agriculture, the ICCIMA news portal reported.

On the sidelines of the meeting, CEO of the Securities and Exchange Organization Hassan Qalibaf-Asl said the document would help ease listing procedures.

To cut red tape and bureaucracy, he said, the SEO will no longer be involved in the listing process as the task is relegated to the TSE and IFB.

“AS is known, the private sector was disappointed with the cumbersome rules and procedures of listing. This MoU will shorten the listing process,” he was quoted as saying.

The ICCIMA is tasked with assessing financial eligibility of companies under its supervision through the so-called single window and expedite their listing process.

Commenting on the details of the meeting, Hossein Selahvarzi, the ICCIMA vice president, said ICCIMA will be in charge of designing and implementing the single window to address all issues pertaining to financing private sector companies via stock market.

Single windows are platforms that are government mandated and allow for submission of information to fulfill regulatory requirements between economic operators and government authorities.

Waiting List

The Economy Minister Farhad Dejpasand spoke to reporters about an agreement with the Social Security Investment Company, known by its local acronym as Shasta, based on which 21 subsidiaries of the major investment holding will be listed in the coming weeks.

Shasta controls nine holdings in a wide range of sectors, including petroleum, petrochemicals, pharmaceuticals, cement, transportation and finance. The holdings manage about 200 subsidiaries.

One of its giant subsidiary holding, Tamin Cement Investment Company offered 15% of its shares today.

In the same vein, Alireza Daliri, an official with Vice Presidency for Science and Technology, said Tuesday that five startups and knowledge-based companies are in the process of listing in the stock market.

The government says it is committed to expanding the bourse by adding more companies to the fast growing market and boost the supply side to absorb the ballooning liquidity flowing into the market.

Huge amounts of liquidity coupled with rising novice investors has led to relentless stock rallies in recent months, but raising concerns about a possible bubble in share prices and inflicting huge losses on retail investors.

Earlier in the week, the government said it would grant tax incentives for companies entering the stock market in the current fiscal year (March 2020-21).

Accordingly, potential listed companies will be accountable only for tax liabilities in the previous fiscal year (March 2019-20) and INTA will not delve into prior tax records.

This should addresses concerns of companies wanting to enter the flourishing share market but fear their (unpaid) tax background may be exposed.

Economists and tax experts, however, have voiced strong reservations about the new incentive on the premise that letting companies get away so easily with tax evasion is not a legal or healthy move.