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Listing Requirements: Ethiopian Securities Exchange

Becoming a listed company on the Ethiopian Securities Exchange (ESX) equity market is a strategic step for businesses seeking to access capital markets and enhance their visibility. To facilitate this process, issuers must adhere to specific listing requirements and fulfill continuous obligations outlined by the Exchange. Here's a breakdown of the key criteria and steps involved in becoming a listed company on the ESX:

1. Company Structure and Registration

To be eligible for listing, companies must operate as share companies with securities duly registered by the Ethiopian Capital Market Authority (ECMA). Additionally, issuers must ensure their shares are fully paid and free from any liens or transfer restrictions.

2. Financial Criteria

Minimum Capital Requirements: Issuers must meet the minimum capital threshold set by the Exchange.

Operating Track Record: For listing on the ESX Main Market Segment, companies should demonstrate an operating track record of at least three years. Alternatively, evidence of a core investor or technical partner with a minimum of three years' operational experience may suffice.

Profitability: Companies must showcase profitability, with declared profits after tax attributable to shareholders in at least one of the last three financial years preceding the application.

Financial Reporting Standards: Financial statements must comply with International Financial Reporting Standards (IFRS) or relevant accounting standards in Ethiopia, along with directives issued by the ECMA.

3. Market Capitalization and Shareholder Requirements

Total Market Capitalization: Companies seeking listing on the ESX Main Market Segment must meet a specified minimum total market capitalization upon listing.

Free Float: An issuer should have a minimum free float of fifteen percent (15%) of the total shares sought for listing, held by at least three hundred (300) public security holders.

4. Document Submission and Compliance

Issuers must submit all necessary documents as prescribed by the Exchange, ensuring compliance with regulatory directives and guidelines. These documents may include financial statements, operational records, and other relevant information.

5. Growth Market Segment Listing:

For companies targeting the ESX Growth Market Segment, similar criteria apply with slight variations:

Operating Track Record: A minimum operating track record of two years is required, or evidence of a core investor with two years' operational experience.

Total Market Capitalization: Companies must meet the specified minimum market capitalization post-listing.

Shareholder Requirements: A minimum of ten percent (10%) of the total shares sought for listing should be held by at least fifty (50) public security holders.

In conclusion, listing on the Ethiopian Securities Exchange offers companies access to capital, enhanced visibility, and opportunities for growth. By understanding and meeting the stringent listing requirements, businesses can position themselves for success in Ethiopia's dynamic capital market landscape. For detailed guidance and assistance throughout the listing process, issuers are encouraged to engage with the Exchange and seek professional advice as needed.

Please refer to the ESX website by clicking here for more and uptodate information.

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