Guidelines & Requirements for Listing on the Ghana Stock Exchange

The Ghana Stock Exchange (GSE) was established in July 1989 as a private company limited by guarantee under the Companies Code of 1963. The GSE provides a facility for the buying and selling of stocks, bonds, shares, securities, etc. A company is listed when its securities are approved by the GSE to be bought and sold on the stock exchange. The Council of Ghana Stock Exchange decides whether or not to approve an application for the listing of securities on the exchange.

To become listed on the GSE, the shareholders of the company must first meet and agree to change their private company status to a public liability company. The company, with the help of lawyers or other legal counsel, then prepares new company regulations that conform to both the Companies Code of 1963 and the requirements of the GSE.

The company discusses the new regulations with the GSE. When found satisfactory, the regulations are forwarded to the registrar to be filed. The company prepares its offer documents through a team of advisers consisting of brokers, lawyers, accountants and other professionals.

The advisers discuss the draft reports from the meetings. The shareholders make key decisions such as share prices and the number of shares to be sold. The company then submits an application to list on the GSE, and the draft offer prospectus is also submitted to the Securities and Exchange Commission for approval.

Once the application is approved, a date is set for the launch of the public offer, in which the GSE discusses details of doing business with the company. If the offer is agreed to, the company agrees on a date for the commencement of trading its shares on the floor of the GSE.

The GSE requires the following information from a company applying to be listed: company background, capitalization and share distribution (authorized and issued capital, distribution of shareholding, etc.), names of directors and key management, list of debts and related details (financing arrangements, interest rates, maturity dates, etc.), company investments and properties, name(s) of competition and industry, profit and loss record for up to three years, any pending legal actions, and financial records such as dividend records and fiscal year end reports.

The GSE has three listing classes: The First Official List (FOL), Second Official List (SOL) and Third Official List (TOL). What list a company is on depends on its capital. A company must have a minimum stated capital of at least 1 million Ghana cedis to be on the FOL, and 500,000 Ghana cedis for the SOL.

Minimum public float, or shares in the hands of public investors, cannot be less that 25 percent of shares issued by the company. Also, payment of shares must be fully paid. The cost of listing on the GSE varies, depending on market capitalization and whether the company is a member. The fees included are application, listing and annual fees.