Prime Market is a market intended for trading in the largest and most prestigious issues of shares in the Czech and foreign companies. The Prime Market may accept either the issues which meet the demanding statutory requirements of the official securities market or the statutory requirements of the regulated market.
Who is the Prime Market intended for?
The companies, whose shares are marketed on the Prime Market, are imposed high demands. If they adhere to the statutory rules of the Official Market they must meet the following criteria:
- market capitalization of the issue at EUR 1,000,000
- a portion of the issue distributed among the public (so-called “free-float”), 25% at minimum
- issuer’s operation period, at least 3 years
Upon its admission to the Prime Market each issuer undertakes to fulfil its disclosure duty in Czech, Slovak or English.
Now, what are the key prerequisites for a successful candidate whose shares would be traded on the Prime Market:
- readiness to share information
- transparent structure and financial flows within the company
- clearly defined plans, goals, strategies, and definitions of measurable performance indicators
- accounting based on the international accounting standards
- ambitious and professional management
What does the Prime Market offer?
Admission to the Prime Market does not only bring the funds to the company but it means much more. Upon its admission to the Prime Market, the company is becoming one of the top companies in the region thereby gaining prestige, which represents not only a useful tool but also a commitment. Henceforth, you are becoming the ones to pace the development and the ones to look up to with admiration.
It is possible to launch the conditional trading in issues of newly subscribed shares which have not yet been accepted for trading up to 10 days in advance of the regular trading on the Prime Market. This service is particularly important from the point of view of the investors who acquired the shares in the IPO process and who are allowed to commence trading in these shares immediately. Therefore, they do not have to wait for the very issue of the securities. Thus, the Prague Exchange in the case of dual listing commences trading in the relevant issue several days earlier than the other markets.
What needs to be done to be admitted to the Prime Market?
- For the issues to be accepted to the Prime Market, the following must be submitted:
- application for admission (in Czech, Slovak or English)
- security prospectus
- certification of ISIN allocation or that of similar identification code
- signed framework agreement between the issuer and the Exchange
- confirmation from the Central Depository regarding the registration of the issue
- certificate of incorporation in the Commercial Register or similar foreign register
- Memorandum of Association or Articles of Association of the issuer, or similar document under the legislation of the issuer’s country of origin
- if the issue is governed by the statutory requirements for the Official Market, annual financial statements for the last 3 years
The Listing Exchange Committee must decide on the admission of an issue within 30 days of the delivery of the respective application.
For the year the issue is admitted to the Exchange, the issuer is exempted from the fee for marketing its issue.