Rights Issue
Definition of Rights Issue
A Rights Issue is a tradable or waivable Security that grants its owner priority to subscribe in an Issuer’s share capital increase pro rata to the number of Securities he owns in the Issuer’s share capital.
General Provisions of Rights Issue
- A Rights Issue is traded on The Exchange - automatically - upon every subscription in a capital increase of a Listed Company directed to all shareholders of the company.
- The shareholder's options regarding a Rights Issue are numerous, including selling, waiving, or retaining these rights, and then exercising the right to subscribe during the designated period.
- The shareholder shall not have the right to subscribe to the Rights Issue if he sells or waives such Rights. Therefore, this right will transfer to the buyer or to the assignee.
- The buyer of a Rights Issue has the right to sell such rights on The Exchange up to five business days prior to the end of the period designated to exercising the rights. The buyer is also entitled to keep the Rights and subscribe during such period.
Obligations of the Listed Company
- When drafting a prospectus for the issuing of a Rights Issue, the listed company shall include the following information:
- The period designated to exercising a Rights Issue
- Ways to dispose of a Rights Issue, whether through trading on The Exchange or through a free waiver of Rights via The Clearing Agency
- The risks associated with buying a Rights Issue in the event of a cancellation of the capital increase
- The schedule for listing and trading a Rights Issue
- The listed company is obligated to announce the capital increase prospectus approved by the Authority on The Exchange’s Website as well as the website of the listed company
- The listed company is obligated to announce the allocation and the subscription results on The Exchange Website as well as the company's website, within a maximum period of five business days from the closing date of the subscription period
- The listed company is obligated to announce the Rights Issue’s trading schedule on The Exchange along with the Authority’s approval of the prospectus
Procedure for Listing a Rights Issue
The listing of the Rights Issue on The Exchange does not require any specific procedures or the issuance of a separate approval from the Authority. The Authority’s approval on the prospectus is an approval on the listing and trading of these Rights on The Exchange.
Rights Issue Process
Additional Information
| Listing Fees for Rights Issue | N/A |
| Rights Issues listing date | As of the date of commencement of subscription for these rights, according to the schedule announced by the company |
| Suspension of trading in Rights Issue | Five business days prior to the end of the subscription period for these rights |
| Delisting of Rights Issue | Once the listed company announces the capital increase results |
| Trading Hours | Regular Market trading hours |
| Price Ticks | Regular Market price ticks will apply |
| Price Limits | No Price Limits |
| Circuit Breakers | No Circuit Breakers |
| Settlement Cycle | T+3 |
| Market Makers | Not Allowed |
| Buy-In | Rights Issue defaults will follow Buy-in Board procedures |
| Reference Price Calculation (first day of trading) | Reference Price = Previous Day’s Closing price – Subscription Price (Par value + Issuance premium) |
| Trading Fees: | Subject to the trading fees designated for the market that the company is listed in. |
| Naming Convention & Symbology | Example: Underlying Security Code: 123 Underlying Security Ticker: Company Rights Issue Number: 1 Rights Issue Year: 21 Rights Issue Sec code: 123121 Tradable Rights Issue Ticker: COMPANY121 Rights Issue Name: Company (Rights Issue 121) |
| Market Index Inclusion | No |
| Sector Index Inclusion | No |
| Trading Sessions & Order Types | Similar to regular market |
| Transfer of Ownership with the Approval of The Exchange | Not permitted |
| Off Market Trades (Negotiated Trades) | Not permitted |
| Stock Swaps | Not permitted |
| Tender Offers for quantities representing not less than 5% and not exceeding 30% of Listed Securities | Not permitted |
| Selling a percentage representing 5% or more of the shares of a Listed Company in an Auction | Not permitted |
| Free waiver of Rights via the Clearing Agency | Permitted |
