"The seminar has been designed primarily to increase the participants' awareness of the benefits that accrue to a company when it becomes listed as well as the attendant responsibilities," explains JSE General Manager, Wain Iton. "The seminar is also a part of a continuing public education initiative through which we are seeking to meet our strategic objective of growing the market over the next five years."
Representatives of 50 to 70 privately-held companies have been targeted to attend the seminar, which will be chaired by JSE Chairman, Roy Johnson. Participants will hear presentations from and be given the opportunity to interact with presenters on each of the following topics:
"The role of the accountant in the transition to public listed company status" Paul Cole, director, KPMG.The keynote speaker, Keith M. King, Director, Corporate & Investment Banking, RBTT Financial Group, Trinidad & Tobago, will examine various strategies for mobilising capital.
Following is our second instalment of the answers to the most frequently asked questions about the listing process:
Who should consider becoming listed?
Listing on the Jamaica Stock Exchange may be appropriate for both well-established and start-up companies. The critical ingredient is that the company has both the calibre management in place and the growth potential to earn the confidence of the investing public. A sufficient number of shares should also be made available to the public in order to make the offer viable.
What are the benefits of becoming listed?
Some of the principal benefits of going public are:
Access to non-interest bearing capital
Tax-free status of dividends to shareholders
Provides increased liquidity for owners and shareholders as well as an exit strategy for venture capitalists.
Provides valuation for company through the market for listed shares
Increases the options for future financing, particularly when investor interest grows enough to sustain a secondary market in the shares
Heightens the company's prestige, recognition and public stature, which often lead to improved business operations and increased public goodwill towards the company
Increases the company's likelihood of attracting and retaining highly qualified employees.
How much does it cost to become listed?
The bulk of the cost of becoming listed through selling shares will be consumed by promotional and advertising efforts. Next would be the cost of the legal, accounting and other professional assistance required to structure the offer. All together, these costs could range from several thousand to several million dollars. Once public, each company must pay annual listing fee to the Jamaica Stock Exchange, ranging from $50,000 to $1 million, based on the number of securities listed.
How long does it take to become listed?
This could range from three months for a going concern that would already be producing most or all of the documentation required to as long as 18 months or more, depending on the company's state of readiness.
What are the responsibilities of a listed company?
Chief among these is the need for transparency and public disclosure. Once a company goes public, it is obligated to provide timely, continuous reporting of corporate information and actions as required by the regulatory agencies. This includes:
Quarterly and annual financial reporting on a timely basis.
Disclosure of all share transactions done by company insiders.
Publication of significant corporate changes.
Establishment and maintenance of effective corporate governance practices.
In general, managing the affairs of the company in the best interests of all of the company's shareholders.
Companies desirous of having their securities listed should, initially, contact a stockbroker/ member of the Jamaica Stock Exchange.
This column is part of an on-going public education programme of the Jamaica Stock Exchange.
