Stock Exchange Listing

Below we have summed up those questions, which most frequently arise in connection with stock exchange listing and continued trading.  If you have not received an answer to your question, please send it to kibtag@bse.hu

How can I receive more information about the stock exchange listing of a company’s equities?

If you would like to receive more information about stock exchange listings, please contact the Listing Division by phone (+36-1-4296733) or e-mail (kibtag@bse.hu).

How long does the Exchange take to evaluate the application for listing?

According to stock exchange rules, the evaluation of the application for listing shall take place within 30 days of the submission of the application (this period may be extended with the period of time allowed for submitting any missing documents). In practice, the evaluation of the application for listing normally takes place within one or two weeks of submission.

Is there a data form which facilitates the listing procedure?

Is order to assist with the preparation of the application for listing, BSE has made a data form which applicants are not obliged to submit but which may prove to be a great help for the issuer when submitting the application for listing.

What is the difference between listing equities on Prime Market, Standard Market or T Market?

Equities may be listed on three different markets. The Exchange's categorization is designed primarily to give investors information to distinguish between listed categories based on various investment criteria. The BSE aims to ensure the simplest possible method for listing, and this is why the conditions of listing on Equities T Market are practically identical to the legal requirements stipulated by the CMA.   For securities listed on Equities Standard Market, in addition to the basic legal requirements, a public transaction is also mandatory with regard to the securities series to be listed. The terms of listing equities on Equities Prime Market differ from the general requirements, since BSE specifies requirements for the size of the securities to be listed (market capitalization), ownership structure (free float), the years of operation and other criteria (such as the class of shares). In addition to the above extra requirements, the Issuer must carry out a public transaciton. If at listing the Issuer fails to make a public transaction, it may request to postpone the public transaction and the CEO shall decide the case in a resolution. In case of a postponement, the public transaction shall be made within a year of the listing date at the latest. If the Issuer fails to make the public transaction within the available time, the CEO - acting at the recommendation of the Commitee of Issuers of the Exchange - may decide to reclassify the equity series to the T Market.  The share series on Equities Prime Market are more liquid in general and have a broader ownership structure. According to specified indices, the Exchange reviews the categorization of securities belonging to the Prime Market every six months.

How large should the company be to be eligible for listing on the Stock Exchange?

Admission of equity series may be requested to any of the three markets of BSE (Prime, Standard or T). On the Standard and T Markets there are no requirements regarding the size of the company, whereas on the Prime Market, the market value of the series of securities intended for listing must reach HUF 5 billion.

Are there any listing requirements regarding the company’s business operations or financial result?

No.

In which category can international companies apply for listing?

Market segmentation does not affect foreign companies. They can apply for listing on the same Markets: Prime, Standard or T.

Is it possible to trade in the equities of a company in a foreign currency?

Yes, it is. The trading and settlement systems allow trading in a foreign currency.

Who passes the decisions about stock exchange listing?

The application is reviewed and evaluated by BSE’s Listing Division, while the decision regarding listing is passed by the Chief Executive Officer of the Exchange.

As the owner of the company, following the stock exchange listing, am I restricted in any way in selling my shares?

BSE’s general regulations for listing contain no such restrictions.

What does “provisional listing” mean?

Even if the applicant is unable to fulfil all the requirements before trading starts, the series of securities become listed on BSE, that is they are added to the product list. Trading, however, may only start following the fulfilment of certain requirements, which can be met with the submission of different documents. The applicant is allowed a maximum of 60 days to fulfil the requirements. Upon a failure to meet the requirements, the CEO issues a decision to reject the listing  and de-lists the security by removing it from the product list.

What costs shall be paid to the Exchange for listing the equity and for presence on the stock exchange?

In the case of listing series of securities, the Exchange does not charge a listing fee. The annual fee payable for continued trading depends on the size of the listed series of securities (a minimum of HUF 1,250,000 and a maximum of HUF 12,650,000). The fee for continued trading shall be paid in arrears, in four quarterly instalments, but in the year of listing the issuer is exempt from paying a fee in the first two quarters of the year. Furthermore, another fee connected to stock exchange presence is the fee charged for publishing information on the Stock Exchange’s website. This fee, to be invoiced monthly, depends on the number and type of publications by the company, and, according to our experience, amounts to between HUF 10,000 and 1,200,000.

Is it necessary to amend the company’s deed of foundation because of the stock exchange listing?

Although BSE’s regulations contain no concrete requirements regarding the contents of issuers’ deed of foundation – therefore, it is not necessary to amend the deed of foundation -, in the case of Hungarian companies, stock exchange presence requires that their deed of foundation be “quotable”. According to BSE’s rules, issuers of equities shall publish the final amount of dividend two (2) exchange days preceding the ex-coupon day. The earliest ex-coupon day may be the third exchange day following the General Meeting resolving on the amount of dividend. (The ex-coupon day is the first exchange day when the particular securities are first traded without a dividend coupon.)  The deed of foundation of companies falling under the scope of Act V of 2013 on the Civil Code shall by all means contain certain provisions in order to ensure the above mentioned operations. For this reason, the deed of foundation shall provide differently from the provisions of the Civil Code.

How is the ticker code of securities determined?

The applicant may request what series of characters should mark its securities in the trading system of the Exchange (this is the so called “ticker code”), and the Exchange tries to do its best to grant this request. The ticker code is a unique alphanumeric code consisting of twelve characters (containing no special characters or ones with diacritical marks). The Exchange supports the use of ticker code which makes a clear reference to the issuer of the security and/or the security.

Continued trading

What regular disclosure requirements shall the issuer of a security meet?

Regular disclose requirements primarily include the financial statements which give a picture of the financial situation of the issuer of securities: annual report, half-yearly report, interim management statements. The issuers under the force of the CMA must also comply with additional reporting obligations set by the CMA by disclosing an annual report summarizing the disclosures of the company during the year, and the number of voting rights and the actual share capital at the end of each calendar month.

What information is subject to extraordinary reporting requirements?

As a general rule, extraordinary disclosure shall be made on information which could directly or indirectly affect the value of or the yield on the issuer’s securities, or could be significant for the market participants in making their investment decisions. The 24/2008 (VIII. 15.) Minsitry of Finance Decree contains guedelines and examples to be followed by issuers (under the force of the CMA) regarding their extraordinary disclosures. Issuers with home member states other than Hungary follow the rules of their jurisdictions.

What is the deadline for meeting the extraordinary reporting requirements?

With regard to the price sensitiveness of such information, the Exchange wants to ensure that the time period during which anybody has the opportunity to take advantage of this information is as short as possible. If the issuer of securities receives such information during trading hours, it is obliged to report it to the Exchange within 30 minutes of becoming aware of the information. Information learned by the issuer following the close of trade shall be disclosed to the Exchange until 8:15 of the next exchange day, before trading starts.

May the announcements of the issuer of securities be published on the Exchange’s website at any time?

It depends on the type of information to be published. The Exchange does not allow the publication of financial reports during trading hours. The financial reports uploaded after 7 o’clock a.m., become public on the Exchange’s website after the close of trading at 17.15 pm.

In accordance with the general rules, extraordinary and other announcements appear on the Exchange’s website one hour following their upload. In the case of extraordinary announcements – because of the significance of the information – the Exchange (within its own competence, in certain cases at the request of the issuer) may suspend trading in the securities in order that every market participant has sufficient time to evaluate the information.

Outside the period relevant for trading (7:00-17:15), the issuer of securities may freely determine the publication time of its announcements.

How can issuers perform their disclosures according to exchange rules?

BSE’s official place of publication is the Exchange’s website, www.bet.hu. The Exchange provides separate software for issuers of securities, through which they can send their announcements intended for publication. The publication system operates with automatic publication parameters in accordance with exchange rules.

In what cases is trading in the securities of a given issuer suspended?

There may be several reasons for the suspension of trading in a given security. In the majority of cases BSE suspends trading in the given security at the request of the issuer of the security before the publication of an announcement which might have an impact on market price. (This can be a period of maximum 10 days.) This ensures that market participants receive information simultaneously, that no market participant can take advantage of any insider information, and that market participants have time to evaluate the information when extremely sensitive information is published, thus ensuring the transparency of trading. For similar reasons, the Exchange may suspend trading in a given security at its own initiation for a maximum of 30 days. BSE may also suspend trading in securities for a maximum of 30 days at the decision of the Hungarian National Bank.

What requirement must a series of equities meet to be included in the BUX index?

Equities may be included in the BUX basket twice a year, at the time of the regular basket review, during which BSE’s Index Committee examines which equities are suitable for index membership. Equities will be included in the basket provided they meet a set of requirements consisting of 7 criteria. During the examination, the Committee is primarily concerned with the size and liquidity of the series of securities. Detailed rules are contained the BUX Manual.

Is it possible for international companies to be included in the BUX Index?

Yes, providing that they meet the requirements for inclusion.