Changes to TSE Rules and Regulations

14.11.2002 TLN

On November 13, 2002, the Financial Supervision Authority approved changes the Tallinn Stock Exchange (TSE) Rules and Regulations (Rules) implemented with regard to establishment of the new Securities Market Act (SMA).

The main changes to the Rules are as follows:

1. As the new chapter of the Rules, the Management Board established the “General Part”.
In this chapter the scope, general provisions and main definitions in aggregate as well as main principles of the TSE and market operation are specified.

2. 2. As the new chapter of the Rules, the Management Board established the “Supervision”.
This chapter summarises all supervisory regulation of the Rules, incl. rights and duties of the TSE in performing supervisory operations and measures, grounds for suspension of activities of Exchange member, suspension of trade in Issuer�s securities, delisting of Issuer�s securities, and for settlement of disputes and all supervisory provisions. Along with other amendments the supervisory provisions in chapter “Membership Rules” were abolished and fully transferred to chapter “Supervision”.

In addition to editorial and restructuring changes some substantial changes have been made. As an absolutely new principle, the possibility to use watch list notation has been established. The purpose of adding a watch notation is to draw the market participants� attention to important circumstances relating to the security or its Issuer, incl. filing of an application to delist the securities, solvency problems etc. The watch notation does not imply any restrictions on or derogations for the Issuer or for the trading of its securities.

Additionally, the principles of suspension of trading and suspension of Exchange member’s activities, as well as the rights of TSE on giving precepts or performing other supervisory operations have been amended, reasoned on the provisions of Securities Market Act.

3. Chapter “Listing Rules” was amended. In addition to editorial and substantial changes the Rules were brought into compliance with the new SMA and harmonised with Listing Particulars of Helsinki Stock Exchange.

Among other changes the term of passing resolutions of listing or refusal of listing was extended to 3 months (previously 1 month). Requirements for Main List market capitalisation were decreased from 300 million EEK to 62 million EEK (4 million euros) and requirements of I-List market capitalisation were increased from 10 million EEK to approximately 15 million EEK (1 million euros). Additionally, the free float (distribution of shares amongst investors) of the I-list was decreased from 25% to 15%. Also, definition of Supplemental Listing Decision as well as the rights and obligations of listing body and its members and their election procedures were established. Proceeding from the new rules the Issuer is not obliged to enter into an agreement with its Sponsor for listing securities. With this amendment the Rules were harmonised with provisions of Helsinki Stock Exchange.

With regard to establishment of the new SMA the provisions of the TSE Free Market were changed. Free Market is a regulated market for the purposes of the SMA. Securities traded on the Free Market are admitted by the Exchange to be traded but they are not listed for the purposes of the SMA or Rules (due to milder requirements for information disclosure). Securities of an Issuer applying for admission of its securities to the Free Market are to be admitted to Free Market if the respective Issuer has announced its intention to apply for the listing of the relevant securities in the Main list or I-list (target list) of the TSE in the future. However, the Listing Committee of the TSE has the right to admit other securities to the Free Market as well. It is prohibited for the Issuer of the securities admitted to the Free Market, including the members of its management and supervisory boards and employees, to make any statements on the basis of which an investor may form a misleading impression that the securitiesof the Issuer have been listed on the TSE.

4. Chapter “Requirements for Issuers” was amended. In addition to editorial and some substantial changes the Rules were brought into compliance with the new SMA.

The list of persons connected with a person in possession of confidential information was supplemented. Persons not listed in the Rules as persons connected with a person in possession of confidential information are deemed such persons by the TSE based on circumstances of a specific case.

Time limits of interim report disclosure were harmonised with instructions of the Estonian Accounting Standards Board (“Guidelines for preparation and presentation of interim reports”). The Issuer is accordingly obliged to make the interim report public within 2 months (previously 3 months).

Requirements of periodic reporting for issuers of debt securities and investment funds were amended. An issuer of debt securities who is a company and an investment fund are accordingly obliged to publish interim reports on their operations and financial results for 6 months and 12 months of the financial year.

Former provisions for suspension of trading and delisting of securities were transferred to chapters “Listing Rules” and “Supervision”.

5. Chapter “Rates of Fines” was amended. In addition to the editorial changes the sanctions for violation of requirements for takeover bids were abolished.

The new version of Rules with aforementioned amendments is available on HEX Tallinn Internet homepage, under section “Amendments to the Rules and Regulations” of “TSE Rules and Legislative Acts”.

According to the decision of the Management Board of TSE, the aforementioned amendments will become effective on December 16, 2002.

Additional information:

Eva Palu
Head of Marketing and PR Department
Tallinn Stock Exchange / Estonian CSD

HEX Tallinn
Tel: +372 640 8800
e-mail: