Tehran Stock Exchange to Launch Prime Market

EghtesadOnline: Tehran Stock Exchange plans to unveil a new market it calls ‘prime market’ within the stock market, head of the TSE said.

News ID: ۷۸۴۷۷۰

21 July 2019

Only listed companies with defendable financial performance are eligible to participate in the new market.

“Only companies with a minimum transparency score of 70 (out of 100) would be accepted in the prime market,” said Ali Sahra’ee, adding that the price range allowed for trading shares increases in this market, ISNA reported.

The price range is currently ± 4% for stocks traded in the TSE. The range is ± 5% at the junior stock market, Iran Fara Bourse. The price range limitation is set to avert price volatility in equity prices. The range is wider in highly volatile markets, according to Financial Tribune.

On the other requirements the listed companies should meet to be eligible to trade in the prime market, Sahra’ee said the companies must have 10 trillion rials ($78 million) in capital and their floating stock should not be less than 25% of the total stock.

Floating stock is the number of shares available for trading of a particular stock. Floating stock is calculated by subtracting closely-held shares and restricted stock from a firm’s total outstanding shares.

Closely-held shares are those owned by insiders, major shareholders, and employees. Restricted stock refers to insider shares that cannot be traded because of temporary restrictions such as the lock-up period after an initial public offering.

Sahra’ee said there is no difference regarding rules governing market makers in this and other markets, adding that participation of market makers is mandatory.