Iraqi Securities and Exchange Commission Regulations 2023: Instructions and Regulations for Listing, Depository, and Trading of Unlisted Company Shares

Iraqi Securities and Exchange Commission Regulations 2023

Based on the provisions of paragraph (12/A) of Section (12) of Legislative Decree No. (74) of the year 2004 and the decision of the Ministerial Council for Economy No. (S.L 283/) dated 2022/5/10 with Article (66/A/1), and in accordance with the Companies Law No. (21) of the year 1997 (amended), the following regulations are issued:

Regulations for the Listing, Depository, and Trading of Shares of Unlisted Companies No. (21) of the year 2023

Article (1) Definitions:

First - The Commission: The Iraqi Securities and Exchange Commission.

Second - The Market: The Iraqi Securities Market.

Third - The Council: The Council of Governors of the Market.

Fourth - The Center: The Iraqi Depository Center, which is responsible for recording ownership of securities and share settlement processes.

Fifth - Unlisted Companies: Unlisted joint-stock companies or those delisted or removed from the market, governed by the provisions of the Companies Law No. (21) of the year 1997.

Sixth - The Platform: The dedicated computer system for trading shares of unlisted companies in accordance with the mechanisms and systems adopted in the Market.

Article (2) Conditions for Listing the Company in the Platform:

First - The joint-stock unlisted company must be established in accordance with the provisions of the Companies Law No. (21) of the year 1997 (amended).

Second - The unlisted company must submit a formal request, signed by the Managing Director, to the Iraqi Securities Market for the purpose of listing in the platform. The request must be accompanied by a certificate and the articles of association, along with the latest minutes of the General Assembly meeting, certified by the Companies Registration Department. The Market shall decide on the request within two weeks, and its decision is subject to the approval of the Commission.

Third - Submission of a signed undertaking by the Managing Director to abide by the prevailing laws and regulations related to the work of the Commission, the Market, and the obligations thereof.

Fourth - Submission of a report on the ownership of major shareholders who own a percentage of 1% or more.

Fifth - Submission of documents supporting the number of shares pledged or mortgaged in favor of others.

Sixth - Submission of a copy of the shareholder register, either in paper form or on CD, to the Depository Center within a period not exceeding (10) days from the date of the final registration decision in the platform. The company is responsible for the accuracy of the information contained therein.

Seventh - Submission of its financial statements for the previous year preceding the submission of the request or the year before it.

Eighth - The regulations issued by the Commission shall govern all matters not covered by a provision in these regulations.

Ninth - Any other matters required by the Market or the Commission.

Article (3) Trading Mechanism in the Platform:

First - Trading in the platform shall take place from 10:00 AM to 1:00 PM.

Second - Client orders issued to trade shares of unlisted companies shall follow the model prepared by the Market.

Third - Orders shall be entered and executed through the trading stations of the brokers.

Fourth - The Market and the Center are obligated to carry out financial clearing and share settlement procedures in accordance with the mechanisms and systems used and their procedures.

Fifth - The Center is obligated to provide the Companies Registration Department with the information contained in Article (126/Fifth) of the Companies Law No. (21) of the year 1997 (amended).

Sixth - The Market is responsible for publishing the following reports and statistics: A - Daily trading reports and statistics, which include the number of trades, the number of shares traded, the highest and lowest trading price for each security, and the average price. B - Monthly trading reports and statistics, which include the same information contained in the daily report.

Article (4) Obligations of Unlisted Companies:

First - Payment of registration fees in the platform, annual participation fees, and commissions approved by the Council and agreed upon by the Commission, to be shared equally between them.

Second - Compliance with Legislative Decree No. (74) of the year 2004 and the regulations issued thereunder, and the Law for Combating Money Laundering and Financing of Terrorism No. 39 of the year 2015 and the circulars issued thereunder.

Third - The company must appoint the Depository Center as its agent in the selling processes conducted by it.

Article (5) General Assembly:

First - The closing price or opening price of any security shall not be calculated.

Second - Trading in the shares of unlisted joint-stock companies shall be suspended on the day of the meeting of the company's General Assembly. The Commission, the Market, and the Center must be notified at least fifteen days prior to the date of the meeting. The company's shares shall return to trading on the day following the General Assembly meeting. The company is obligated to send the decisions of the General Assembly to the Iraqi Securities Market immediately after the meeting.