MERJ Exchange – Listing Rules | MERJ Documentation

I. GENERAL PROVISIONS

A. Purpose and Applicability

LR1 Purpose

These Listing Rules are designed to provide issuers with access to trading that is as free and fair as possible while ensuring transparency for investors in terms of the quality of issuers and material information about their securities.

LR2 Applicability

a) The Listing Rules contain general provisions and govern the listing of equity securities on MERJ Exchange.

b) The listing of other products is governed by Additional Rules.

B. Powers of the Listing Committee

LR3 Regulatory Standards and Decision-Making Authority

a) Pursuant to Section 12(2) of the Securities Act 2007 and the authority vested in it by the Controlling Body, the Listing Committee decides on applications of securities to trading, as well as the allocation of securities to the individual MERJ Exchange standards for equity and debt securities.

b) The standard for equity securities is divided into the following regulatory standards:

Basic Standard
General Standard
Main Standard
Standard for Investment Entities
Standard for SPACs
Standard for Periodic Liquidity
Standard for Global Depository Receipts

c) The standard for debt securities is divided into:

Standard for Bonds
Standard for Derivatives
Standard for Exchange Traded Products

d) The Listing Committee may set criteria according to which securities or categories of securities are to be traded on markets that MERJ Exchange operates.

e) The Listing Committee may propose changes to the Listing Rules for consideration by the Controlling Body.

f) The Listing Committee is the senior most body ensuring that issuers fulfill their obligations during listing.

g) The Listing Committee may demand that issuers and/or guarantors provide all the information (e.g. documents, explanations, legal opinions and third-party statements) that is relevant to the purpose of these Listing Rules. Any associated costs incurred may be charged to the applicant.

h) The Listing Committee may demand that an issuer and/or guarantor publish certain information deemed important to the fulfillment of the obligations prescribed in these Listing Rules.

i) If the issuer and/or guarantor does not make a disclosure that is required pursuant to these Listing Rules or the Listing Committee, MERJ Exchange may publish the information itself if it is able to do so.

j) The Listing Committee may require issuers to use specified electronic platforms for the purpose of disseminating information relating to the issuer and its disclosures required pursuant to these Listing Rules.

j) The Listing Committee may impose additional requirements or conditions on issuers where deemed necessary to protect investors or maintain market integrity.

j) The Listing Committee rules on suspension of trading, termination and cancellation of a listing, and sanctions.

k) The Listing Committee may require an issuer to comply with a higher regulatory standard if it meets the requirements of that standard for the prior 12-month period (mandatory change of regulatory standard).

l) The Listing Committee will take the interests of market participants, investors and issuers into account in its activities.

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LR4 Duties of the Listing Committee

The Listing Committee must -

a) Ensure consistent and fair application of the Listing Rules to all issuers;

b) Ensure the effective monitoring of ongoing compliance of listed issuers with the Listing Rules and applicable regulations;

c) Ensure that high standards of disclosure and transparency are maintained in the market;

d) Ensure complaints and disputes related to listing matters are addressed promptly and fairly;

e) Review and update the Listing Rules periodically to reflect changes in laws, regulations, and market practices or otherwise where opportunities for improvement are identified;

f) Liaise with regulatory authorities to ensure coordination and compliance with overarching regulatory frameworks;

g) Maintain confidentiality of information received in the course of its duties, except where disclosure is permitted by any provision of these Listing Rules or otherwise required according to applicable law; and

h) Maintain the official list of securities.

LR5 Directives

The Listing Committee may issue Directives governing the details of how the Listing Rules and Additional Rules are to be applied.

LR6 Circulars and Regulatory Notices

a) The Listing Committee may explain its practices or provisions of the Listing Rules by means of Circulars.

b) The entry into force of new provisions or amendments thereto shall be announced in the form of Regulatory Notices.

LR7 Exemptions

a) General Authority

The Listing Committee may, at its sole discretion, grant exemptions from, or modifications to, the requirements set out in these Listing Rules, provided that such exemptions or modifications:

i. Are consistent with the objectives and principles of these Listing Rules;
ii. Do not compromise the integrity, transparency, or fairness of the market; and
iii. Are deemed necessary or appropriate in the circumstances to facilitate the listing or continued listing of securities.

b) Application for Exemptions or Modifications

An applicant or listed issuer seeking an exemption or modification under this clause must submit a written request to the Listing Committee, outlining:

i. The specific provisions from which an exemption or modification is sought;
ii. The reasons and justification for the request;
iii. Supporting documentation, as required by the Listing Committee.

c) Conditions of Exemptions or Modifications

Any exemption or modification granted by the Listing Committee may be subject to conditions or additional requirements, which must be adhered to by the applicant or listed issuer.

d) Publication and Disclosure

The Listing Committee reserves the right to disclose any exemptions or modifications granted, including the rationale and any conditions imposed, unless such disclosure is deemed contrary to the public interest or the interests of the market.

e) Non-Precedential Nature

The granting of an exemption or modification shall not constitute a precedent for future applications, and each application will be considered on its own merits.

II. LISTING

A. Listing Requirements

LR8 Principle

a) The applicant must meet and provide evidence that the following requirements are met with regard to the issuer and its securities.

b) When in the interests of the public, the Listing Committee may reject a listing application even when the listing requirements have been fulfilled.

1. Issuer Requirements

LR9 Incorporation and Valid Existence

The issuer must be duly organized, validly existing and in good standing under the laws of each jurisdiction in which the issuer is organized or does business.

LR10 Duration

a) The issuer must have been in existence for at least three years.

b) Exemptions for young companies are laid down in a Directive.

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b) Audit Requirements

The following lays down the audit requirements for prior years according to the stated listing standard:

i. Basic Standard:
Financial statements for the most recent financial year must be at least auditor reviewed in accordance with –

a. International Standard on Review Engagements (ISRE) issued by the International Auditing and Assurance Standards Board (IAASB); or

b. equivalent standards according to the recognized accounting framework of the issuer.

ii. General Standard:
Financial statements for the prior years must meet one of the following requirements:

a. If presenting two (2) years the statements must be auditor-reviewed in accordance with ISRE 2400 or ISRE 2410, or equivalent standards applicable under the recognized accounting framework.

b. If presenting only one (1) year, the financial statements must be fully audited in accordance with:

1. International Standards on Auditing (ISAs), as issued by the IAASB; or

2. Equivalent audit standards under the recognized accounting framework of the issuer.

iii. Main Standard:
The financial statements for the required reporting period must be fully audited in accordance with:

a. International Standards on Auditing (ISAs), as issued by the IAASB; or

b. Equivalent auditing standards under the recognized accounting framework of the issuer.

LR12 Auditors

a) The issuer must appoint an external auditor that meets the requirements of these Listing Rules for each financial year.

b) The external auditor must:

i. Be independent of the issuer;

ii. Be registered as a public accounting firm with a body that is a member of the International Federation of Accountants (IFAC) or another body acceptable to MERJ Exchange; and

iii. Have adequate resources and experience to carry out the audit.

c) The issuer must report any change to its external auditor including reasons for the change and any disputes or concerns raised by the auditor.

d) Failure to appoint or maintain a qualified auditor in compliance with these Rules may result in suspension or trading or delisting of securities.

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LR13 Auditor’s Report

a) Content of the Auditor’s Report

The auditor’s report must include a statement as to whether the issuer's financial statements:

i. Have been prepared in accordance with International Financial Reporting Standards (IFRS) or another recognized financial reporting framework;

ii. Present a true and fair view of the issuer’s financial position, results, and cash flows; and

ii. Comply with the applicable auditing standards, which must be:

a. International Standards on Auditing (ISAs), as issued by the International Auditing and Assurance Standards Board (IAASB); or

b. An equivalent auditing standard recognized by MERJ Exchange.

b) Requirement for an Unqualified Audit Opinion

i. The financial statements of all MERJ listed issuers must receive an unqualified (clean) audit opinion from an independent auditor.

ii. The following types of audit opinions will be considered a breach of the Listing Rules, unless explicitly approved by the Listing Committee under exceptional circumstances:

a. Adverse Opinion – Indicates that the financial statements do not fairly represent the financial position, results, or cash flows of the issuer.

b. Disclaimer of Opinion – Indicates that the auditor was unable to obtain sufficient audit evidence to form an opinion.

c. Qualified Opinion – Indicates that the financial statements contain material misstatements or limitations in scope that impact compliance.

iii. Exceptions:

A qualified opinion may be accepted only if:

a. The qualification relates to a specific technical issue (e.g., a minor accounting policy divergence) that does not materially impact the financial health, governance, or compliance of the issuer; and

b. The issuer provides a written explanation and supporting evidence to the satisfaction of the Listing Committee.

c) Rectification

Any listed issuer submitting financial statements with a modified audit opinion must take corrective actions as follows:

i. Adverse Opinion or Disclaimer of Opinion:

The issuer must submit a rectification plan addressing the identified issues for approval by the Listing Committee within 90 days.

ii. Qualified Opinion:

a. The issuer must:

1. Submit a rectification plan subject to review by the Listing Committee; or

2. Disclose why the qualification does not impact compliance with Listing Rules.

b. The Listing Committee may impose additional conditions before allowing continued listing.

iii. Emphasis of Matter:

If the audit report contains an Emphasis of Matter (indicating uncertainties or exceptional circumstances), the issuer must provide supplemental disclosures explaining the issue and any mitigating actions taken.

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LR19 Listing by Class

The listing must be for the entirety of the issued securities of the class or category.

LR20 Free Float

The securities must have an adequate free float at the time of listing:

a) Basic: No minimum free float requirement under the Basic Standard.

b) General: Minimum of 10% of the issuer’s total outstanding securities in the same class or category held by public holders.

c) Main:

i. Minimum of 20% of the issuer’s total outstanding securities in the same class or category held by public holders.

ii. No applicable to preference shares, warrants or convertible debt.

d) The Listing Committee, at its sole discretion, may allow a derogation from this requirement in the following circumstances:

i. The securities will be restricted to professional investors; or

ii. The securities to be listed are anticipated to be traded at a rate that allows for sufficient liquidity.

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LR23 Settlement

The securities must be eligible for clearing and settlement through one of the approved settlement systems or mechanisms approved by MERJ Exchange.

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LR29 Form of the Listing Particulars

a) As a general rule, the Listing Particulars must be a single document unless otherwise specified in these Listing Rules or authorized by the Listing Committee.

b) If the issuer intends to issue securities under an approved program or where the issue price and/or volume is/are not yet known at the time of submitting the application and Listing Particulars, this information may be provided at a later date as a supplement to the Listing Particulars with these two parts then forming the final Listing Particulars.

c) Producing the Listing Particulars in two parts is only allowed when all of the following conditions are met:

i. The criteria and/or conditions for establishing the missing information must be clearly explained in the Listing Particulars and subsequent Official Notice;

ii. The Official Notice must indicate that the missing information will be published no later than at the start of the first day of trading, be provided free of charge to interested investors, and state the intended form of publication of same;

iii. The first part of the Listing Particulars must be referred to as the Listing Particulars and not any other reference as the supplement will be included later to form the full Listing Particulars; and

iv. The supplement should include the issue price, issue volume, and/or any other additional information required, and the supplement must also state that the final Listing Particulars comprises the Listing Particulars together with its supplement.

f) Information may be included in the Listing Particulars by referencing one or more previously or simultaneously published documents ("reference documents") provided that the following requirements are observed:

i. The issuer must ensure that any information incorporated by reference to these reference documents contain the latest information available to the issuer;

ii. In circumstances where a reference is made to a reference document which contains information that is no longer accurate or is not the latest available information, this must be indicated in the Listing Particulars and the updated information must be provided;

iii. If reference is made to any specific portion of a reference document, then the Listing Particulars must specify the relevant portions to the investors;

iv. An incorporation by reference should usually be restricted to any of the following reference documents:

a. periodic interim financial statements;

b. previous auditors' reports and annual financial statements that have been drawn up in compliance with applicable financial reporting standards in accordance with LR 11;

c. documents that have been produced in association with a specific transaction such as a merger or spin-off;

d. documents and Listing Particulars that have previously been approved by the Listing Committee and published, provided that they are no more than 12 months old when the listing application is submitted;

e. information that has been sent to securities holders.

v. Reference documents that are to be incorporated by reference to the Listing Particulars must be submitted with the Listing Particulars at the same time as the Listing Particulars;

vi. The issuer must ensure that any reference document will be made available in printed form or electronically free of charge with no requirement for the requesting party to qualify their interest and the location of the reference document must be stated prominently in the Listing Particulars.

g) All Listing Particulars submitted to the Listing Committee must bear the word “DRAFT” on every page unless the Listing Committee has approved such a Listing Particulars.

h) Listing Particulars shall be valid for a period of six (6) months from the date of the approval.

i) The Listing Particulars must be published no later than the listing date.

j) Listing Particulars must include the information as prescribed in the relevant scheme for the type of security being issued and the nature of the activities of the issuer.

k) The Listing Particulars must include a statement from the issuer or guarantor which states that “the directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.”

LR30 Abridged Listing Particulars

a) The Listing Particulars may be abridged if securities from the same issuer are already listed on MERJ Exchange or a recognized overseas securities exchange, and if any new securities are offered, it is limited to holders on the basis of ordinary or preferential subscription rights, either free of charge or against payment.

b) The relevant Listing Particulars schemes contain guidance as to the content that may be omitted to abridge the Listing Particulars.

LR31 Exemption of Specific Information from Listing Particulars

a) The Listing Committee may, at its sole discretion, authorize the omission of certain information from the Listing Particulars of an issuer if requested and the issuer can satisfy that:

i. the information is of minor importance and will have no bearing on the assessment of the assets and liabilities, financial position, profits and losses of the issuer; or

ii. the securities that are to be listed are also listed on another exchange in a recognized jurisdiction and the issuer's periodic reporting has complied with the financial reporting requirements laid down in these Listing Rules for the last three years; or

iii. disclosure of the information would be seriously detrimental to the issuer (e.g. trade secrets, proprietary information, incomplete negotiations, etc.) and the omission will not mislead investors or potential investors to the facts and circumstances necessary to make an informed assessment of the issuer and characteristics for the securities in question.

b) The issuer and its directors will be held liable for any unauthorized omission from the Listing Particulars that may have influenced the decision of the Listing Committee in granting a listing, or the investors or potential investors in making an informed investment decision.

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2. Official Notice

LR32 Official Notice

The issuer must publish an Official Notice.

LR33 Purpose

The purpose of the Official Notice is to draw investors’ attention to:

a) the listing or transaction for which an application has been submitted;

b) the option for obtaining a prospectus, Listing Particulars, and any addendum, if any, free of charge including details if it is in available in printed from as well as where it can be accessed electronically;

c) if the issuer is not required to prepare a prospectus or prepares Abridged Listing Particulars, it must be explicitly mentioned;

LR34 Time of Publication

The Official Notice must be published no later than 8:00 a.m. UCT +4 on the day of the listing.

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LR38 Submitting a Listing Application

The listing application must be submitted by a Recognized Representative.

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Directive Recognized Representatives
Issuer Declaration

Issuer Declaration.pdf

PDF Document

LR41 Recognized Representative Declaration

Prior to the planned listing date, the Recognized Representative must submit a duly signed declaration containing specified confirmations.

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LR47 Interim Report

a) The issuer is required to publish at least semi-annual reports based on the listing standard applicable to the issuer and any additional information required as laid down by Directive.

b) There is no need for the interim financial statements to be audited or reviewed by an auditor.

c) If quarterly financial statements are published, they must be drawn up using the same principles as the semi-annual statements.

d) The issuer is encouraged to include a business update covering -

i. A brief overview of the issuer's financial performance or other KPIs.

ii. Updates on any significant events or developments.

iii. Any other information necessary for an informed assessment of the issuer's activities.

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LR48 Financial Reporting Standards

Annual and interim financial statements must be drawn up according to a financial reporting standard recognized by the Listing Committee and the listing standard applicable to the issuer.

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LR49 Closed Periods

a) The time between the completion of an issuer’s financial results and the announcing of these results to the public is a “closed period”.

b) In addition to general prohibition on insider trading, Affected Employees are prohibited from trading in the issuer’s securities or derivatives thereof during a closed period.

c) In addition to the general prohibitions on trading pursuant to clause b), the following specific periods are considered closed periods for issuers with a primary listing pursuant to the stated standard:

i. General Standard

a. Interim Reporting - ten (10) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

b. Annual Reporting - fifteen (15) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

ii. Main Standard

a. Interim Reports - fifteen (15) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

b. Annual Report – twenty-five (25) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

B. Other Duties to Provide Information

LR50 Corporate Calendar

a) The issuer is required to maintain a calendar or important events and corresponding dates that may be material for an investor (annual general meeting dates, publication deadlines for interim and annual reports) covering at least the current financial year and keep it up to date.

b) The issuer must provide MERJ Exchange with the URL on the issuer’s website and MERJ may publish this link electronically.

LR51 Regular Disclosures

a) Issuers must promptly disclose material information about their business and rights attached to securities as laid down by Directive.

b) For changes in rights attached to securities the corresponding notification must be made in ample time and by suitable means for investors to exercise their rights.

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LR53 Postponement of Disclosure

a) The issuer may postpone the disclosure of a price-sensitive fact if the fact is based on plans or decisions of the issuer and its disclosure might prejudice the legitimate interests of the issuer.

b) The issuer must have internal controls and policies that ensure only those who need to know are aware of the price-sensitive facts and internal rules and processes to ensure that the price-sensitive facts remain confidential for the duration of the time the disclosure is postponed. If the price-sensitive facts leak, the market must be informed without delay pursuant to LR52.

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LR55 Notification of Non-Compliance

a) Issuers must promptly notify MERJ Exchange if they become aware of any non-compliance with the Listing Rules or applicable regulations.

b) The notification should include details of the non-compliance and steps taken to rectify the situation.

C. Corporate Governance

LR56 Introduction

Corporate governance is essential for maintaining investor confidence and ensuring the integrity of the market. These requirements are designed to promote high standards of corporate governance among issuers listed on MERJ Exchange, with requirements proportionate to the size and complexity of the issuer.

LR57 Application of Corporate Governance Requirements

The Corporate Governance requirements are applied proportionally based on the listing standard under which the issuer is listed:

Basic Standard: Minimal governance requirements suitable for smaller or early-stage companies.

General Standard: Moderate governance requirements balancing compliance burden and investor protection.

Main Standard: Comprehensive governance requirements reflecting higher expectations for larger or more established companies.

LR58 Board of Directors

a) Composition by Listing Standard

a) Basic Standard: The issuer must have a board of directors with at least two (2) independent directors.

b) General Standard: The issuer must have a board of directors with at least two (2) independent directors and an Audit Committee composed of least a majority independent directors.

c) Main Standard: The issuer must have a board of directors with at least three (3) directors, the majority of which must be independent directors.

b) Definitions

"Executive Officer" when used with reference to a company, means its CEO/president, CFO/principal financial officer, Controller/principal accounting officer (or, if there is no such accounting officer, the controller), any heard or vice-president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the company. Executive officers of subsidiaries or parents of the company are deemed executive officers of the company if they perform such policy-making functions for the company.

"Independent Director" means a person who is not an Executive Officer or employee of the Issuer and who does not have a relationship that the board believes would interfere with the exercise of independent judgment in carrying out director responsibilities. For this rule, "Family Member" includes a person's spouse, parents, children, siblings, in-laws, and anyone who shares their home. The following persons are not considered independent:

A director who is or was employed by the issuer in the past three years;

A director who received compensation over $120,000 from the during any twelve consecutive months in the past three years, except for board service, compensation to a Family Member who is a non-executive employee, or benefits under a non-discretionary compensation plan;

A director with a Family Member who is or was an Executive Officer of the Issuer in the past three years;

A director who, or whose Family Member, is a partner, controlling Shareholder, or Executive Officer of an entity that received payments from the issuer exceeding 5% of that entity’s gross revenues or $200,000 in the current or past three fiscal years, other than for investments in the issuer's securities or non-discretionary charitable contributions;

A director who, or whose Family Member, is employed as an Executive Officer of another entity where any of the issuer’s Executive Officers serve on that entity’s Compensation Committee;

A director who, or whose Family Member, is a current partner of the issuer's outside auditor, or was a partner or employee of the issuer's outside auditor and worked on the issuer's audit during the past three years.

The three-year look-back period for relationships starts when the relationship ends. Employment as an interim Executive Officer for up to one year does not disqualify a director from being independent afterward, though participation in financial statement preparation would preclude audit committee service for three years.

c) Cure Period for Majority Independent Board

If non-compliance is due to one vacancy or a director ceasing to be independent beyond their control, the issuer must regain compliance by the next annual shareholders meeting or within one year, whichever is sooner. If the annual meeting is within 180 days of the event, the issuer has 180 days to regain compliance. The issuer must notify MERJ immediately upon learning of non-compliance.

LR59 Audit Committee

a) Requirements by Listing Standard

i. Basic Standard: The establishment of an Audit Committee is optional. The full board may oversee audit functions.

ii. General Standard: The issuer must establish an Audit Committee composed of at least a majority independent directors.

iii. Main Standard: The issuer must establish an Audit Committee composed of at least three (3) directors, with a majority being independent directors.

b) Cure Periods for Audit Committee:

i. If a committee member ceases to be independent for reasons beyond their control, they may remain on the Audit Committee until the next annual shareholders meeting or one year from the event causing non-compliance, whichever is sooner. The issuer must notify MERJ immediately upon learning of non-compliance.

ii. If there is one vacancy on the Audit Committee and no other member is relying on the cure period, the issuer has until the next annual shareholders meeting or one year from the event causing non-compliance to regain compliance. If the annual meeting is within 180 days of the event, the issuer has 180 days to regain compliance. The issuer must notify MERJ immediately upon learning of non-compliance.

LR60 Phase in Period for Independent Directors and Audit Committee

A Company applying for listing pursuant to the General Standard may submit a written request, which may be granted by the Listing Committee in its sole and absolute discretion, to be permitted to phase in its compliance with the corporate governance standards set forth in this LR58 as follows:

a) At least one member of the Board of Directors and the Audit Committee must be independent at the time of application;

b) At least two members of the Board of Directors and a majority of the members of the Audit Committee must satisfy the independence requirement within the later of 90 days after the Company begins trading on MERJ Exchange or the time of the Company’s next shareholder meeting. In any event, the independence requirement must be satisfied within one year of the Company joining MERJ Exchange.

LR61 Code of Conduct

a) All issuers must adopt a Code of Conduct applicable to directors, officers, and employees.

b) The Code of Conduct should address:

Ethical behavior and compliance with laws.
Managing conflicts of interest.
Protection and proper use of company assets.
Confidentiality of material information that has yet to be published.
Trading policy including prohibition of Affected Employee’s trading during closed periods, insider trading, reporting requirements for trades of substantial shareholders, and consequences and potential penalties for violations of this policy including potential termination of employment and potential legal consequences.

c) The Code of Conduct must be made publicly available.

LR62 Financial Reporting and Controls

a) The Board of Directors is responsible for ensuring the integrity of the issuer's financial reporting and internal controls.

b) Basic Standard issuers may fulfill this responsibility through Board of Directors oversight.

c) General and Main Standard issuers must establish appropriate processes and, where applicable, committees to oversee financial reporting and internal controls.

LR63 Shareholder Rights and Meetings

a) Issuers must facilitate the effective exercise of shareholder rights.

b) An Annual General Meeting (AGM) must be held within six (6) months of the financial year-end.

c) Notice of meetings must be given to shareholders in a timely manner, specifying the date, time, venue, and agenda.

LR64 Related Party Transactions

a) All related party transactions must be conducted on terms equivalent to those prevailing in arm's length transactions.

b) Issuers must have processes for reviewing and approving related party transactions, which may be overseen by the Board of Directors, the Audit Committee or another independent body.

LR65 Corporate Actions

a) Announcements

The issuer must provide timely notice of certain corporate actions, including dividends, stock splits, reverse splits, name changes, mergers, acquisitions, dissolutions, change in nature of securities, bankruptcies or liquidations, at least 10 business days prior to the record date.

b) Share Buybacks

i. A share buy-back occurs when an issuer or its subsidiary buys back its own securities from investors, either in the market or by making a formal offer , which decreases the number of issued shares in the market.

ii. An issuer shall not make any payment in whatever form to acquire any previously issue securities if there are reasonable grounds for believing that:

a. the issuer would be unable to pay its debts in the ordinary course of business after the purchase of its securities; or

b. the liabilities of the issuer would exceed by the assets after the repurchases had been completed.

iv. An issuer may proceed with the buy-back of its securities only upon receiving approval from MERJ Exchange as to the terms and conditions of the share buy-back.

v. Any shares acquired in a share buy-back must be cancelled by the issuer upon completion of the acquisition.

c) New Issuances

i. General Principle

Any new issuance of securities must ordinarily first be offered to existing holders of the issuer’s listed securities on a pro rata basis before being offered to other investors where such issuance would have a dilutive effect on those holders either immediately or in the future (e.g. convertible debt, options, warrants). This requirement ensures that existing shareholders have the opportunity to maintain their proportional ownership in the issuer.

ii. Exceptions to the General Principle

The requirement to offer new securities pro rata to existing shareholders shall not apply in the following circumstances:

a. Issuances Related to Acquisitions or Strategic Transactions

The issuance of securities as consideration in a bona fide acquisition, merger, consolidation, or similar strategic transaction, provided that –

1. The transaction has been approved by the issuer’s Board of Directors; and

2. The issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained.

b. Public Offerings

The issuance of securities through a public offering, whether by way of an initial public offering (IPO), follow-on offering (FPO), or other similar mechanisms.

c. Private Placements

The issuance of securities in a private placement to professional investors or equivalent in relevant jurisdictions of the investors, provided that the issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained by an ordinary resolution.

d. Convertible Debt or Other Instruments

The issuance of securities pursuant to the conversion of convertible debt or other convertible instruments, where the terms of such instruments have been previously approved by the Board of Directors and, where required, by the shareholders.

e. Debt-to-Equity Conversion

The issuance of securities to convert outstanding debt into equity as part of a debt restructuring plan, provided that -

1. The conversion has been approved by the issuer’s Board of Directors and, where necessary, by the shareholders;

2. The conversion terms are disclosed, including the potential dilutive impact on existing ownership;

3. The conversion complies with the issuer’s Articles, applicable laws and regulations;

4. The issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained by an ordinary resolution.

f. Employee Stock Plans

The issuance of securities pursuant to employee stock ownership plans, stock options, or other employee benefit plans duly approved by the issuer’s Board of Directors and, where necessary, by shareholders.

g. Regulatory or Legal Requirements

The issuance of securities to comply with regulatory or legal requirements, such as to meet capital adequacy requirements imposed by a regulator.

h. Issuances Below Specified Thresholds

Issuances that result in the issuance of securities amounting to less than 20% of the outstanding shares of the relevant class prior to the issuance over any rolling 12-month period provided that the issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained by an ordinary resolution.

i. Shareholder-Approved General Authority

The issuance of securities pursuant to a general or specific authority granted by shareholders at a general meeting, allowing directors to issue up to 20% of the total outstanding shares for a period not exceeding 12 months.

j. Other Exceptions Approved by the Exchange

Any other issuance specifically approved by MERJ Exchange as being in compliance with the principles of fairness and transparency.

iii. Disclosure and Approval Requirements

a. Issuers must provide full and timely disclosure of any new issuance of securities, including the terms, purpose, and potential dilutive impact on existing shareholders.

b. Shareholder approval by ordinary resolution must be sought for new issuances where required under applicable law, regulation or the issuer’s Articles.

LR66 Compliance with Applicable Laws

All corporate actions must comply with the applicable laws, regulations and Articles of the issuer.

LR67 Continuous Improvement

Issuers are encouraged to continuously evaluate and improve their corporate governance practices beyond the minimum requirements.

IV. Suspension of Trading, Delisting and Cancellation

LR68 Suspension of trading

a) MERJ Exchange may, at its own discretion, or on the request of an issuer, suspend the trading of a listed security where unusual circumstances exist (e.g. a suspected breach of these Listing Rules, an important disclosure event of the issuer has yet to be disclosed or where there is unusual trading activity) indicates such a suspension is advisable.

b) The suspension may be lifted once conditions return to normal, including any necessary disclosure requirements having been published as applicable.

LR69 Delisting of securities

a) The Listing Committee may cancel a listing of securities in the following cases:

i. following a justified application to delist by an issuer which must include confirmation that the necessary approvals have been obtained and a signed declaration stating the reasons for the application. The Listing Committee must take into account the interests of trading on MERJ Exchange, investors and the issuer and may make delisting conditional upon due notice and the observance of appropriate waiting periods.

ii. if the solvency of the issuer is in serious doubt, or insolvency or liquidation proceedings have already commenced, the securities will be delisted no later than the time at which their tradability is no longer guaranteed;

iii. if the Listing Committee deems that there is no longer a sufficiently liquid market in the securities;

iv. if trading has been suspended for a continuous three-month period, and the reasons for the suspension continue to exist; or

v. if the listing requirements specified in LR26 are no longer fulfilled.

b) If the auditor resigns, is terminated or ceases to meet the requirements of LR12 a new auditor must be retained within a reasonable amount of time to be determined by MERJ Exchange. If the issuer does not appoint a suitably qualified auditor pursuant to LR12 by the expiry of the allotted time, the Listing Committee will instigate delisting proceedings.

c) Before commencing involuntary delisting procedures relating to listed securities of a MERJ issuer, MERJ Exchange will:

i. inform the issuer in writing of its intention to delist the security;

ii. provide the issuer with the reasons for the intended delisting of the security; and

iii. call upon the issuer to show cause, within a period determined by MERJ Exchange, why the delisting should not be affected.

See also:

VI. Sanctions

LR71 Responsibility and Procedure

Responsibility for instigating and conducting sanction proceedings is governed by the Rules of Procedure.

See also:

LR73 Sanctions

a) One of more of the following sanctions may be imposed on a MERJ issuer or its guarantor:

i. censure;

ii. publish the fact that there was a censure;

iii. suspension of trading;

iv. levy a fine of up to SCR 10,000 for negligence or SCR 100,000 in cases of wrongful intent;

v. delisting or reallocation to a different regulatory standard;

vi. withdrawal of recognition.

b) One or more of the following disciplinary measures may be taken against a Sponsor Advisor:

i. warning;

ii. reprimand;

iii. issue of a new registration decision under stipulations and/or conditions;

iv. suspension of registration (for two years at most);

v. withdrawal of registration.

c) In determining the sanction, the competent body shall consider the severity of the infraction and the degree of fault. In the case of a fine, the competent body will consider the potential impact of the sanction on the party concerned.

See also:

LR76 Appeal Decisions

a) Decisions of the Appeals Committee may uphold, modify, or reverse the initial decision.

b) All appeals decisions are final and binding on all parties involved.

See also:

LR84 Previous Annual Financial Statements

The requirements of LR11 (Previous Annual Financial Statements) do not apply to Investment Entities.

LR85 Free Float

a) The minimum capitalization and free float requirements specified in LR20 (Free Float) may be waived for an Investment Entity in appropriate circumstances and shall not apply to open-ended funds, except for Exchange Traded Funds (ETFs).

b) The requirements in paragraph b) above will automatically be waived if a MERJ Exchange member undertakes to act as a market maker for the securities to be listed.

c) MERJ Exchange may include implementing provisions regarding market making in its Market Rules or in a Directive.

See also:

MERJ Exchange Market Rules
Listing Particulars Scheme - Investment Entities
- Issuer Declaration

Issuer Declaration.pdf

PDF Document

2. Continuing Obligations

LR92 Annual Reporting

a) The Investment Entity must publish annual in accordance with LR46 and LR47, including any additional information determined by the Listing Committee. The notes to the annual financial statements must be confirmed by the auditors.

See also:

LR93 Interim Reporting

The Listing Committee may prescribe additional or different requirements in terms of the content and intervals for interim reporting by different types of investment entities and these requirements must be adhered to at all times by the investment entity.

See also:

LR96 Compliance with Investment Policy

a) The principles of the Investment Policy must be complied with at all times from the date of listing.

b) If the issuer has been established for less than six (6) months or if capital is being raised with the listing, the issuer must begin complying with the principles of the Investment Policy no later than three (3) months from the listing date.

c) If it is no longer possible to comply with the Investment Policy, the Investment Entity must notify investors of any major deviations, provide a plan of action, and the period within which the plan will be implemented. The issuer must notify the market when the plan has been successfully completed.

LR97 Changes to Investment Policy and Compensation Model

a) Except in the case of an open-ended fund, any changes to the Investment Policy or compensation model require approval of the investors of the respective class of securities by an ordinary resolution.

b) Any changes to the Investment Policy or compensation model must be disclosed.

c) Compliance with the amended provisions of the updated Investment Policy must be adhered to no later than three (3) months from entry into force.

See also:

3. Further Modifications, Exceptions, and Additions

The following rules in this Section 3 offer further modifications, exceptions or additions to those already provided in Sections 1 and 2 for specific types of Investment Entities.

LR99 Feeder Funds

a) The master fund(s) must be listed on MERJ Exchange or a recognized overseas securities exchange, be a regulated collective investment scheme in a recognized jurisdiction approved for the same targeted investors as the feeder fund, or otherwise satisfy MERJ Exchange that the master fund(s) would meet these Listing Rules if it were itself applying for listing.

b) MERJ Exchange must be satisfied that sufficient information regarding the master fund(s) will be made available to investors in the feeder fund within specific regular time limits.

c) Feeder funds must include additional information in the Listing Particulars for each master fund.

LR100 Closed-Ended Funds

A closed-ended fund must include in its Articles that it will obtain prior approval from holders of its listed securities for certain significant actions, including material changes to its Articles, changes in rights of any class of listed securities, creation of additional classes of securities, issues of further securities at a price less than NAV per share, changes in investment policies or objectives, and intentions to extend or terminate the fund.

LR101 Open-Ended Funds

a) Where an open-ended fund invests in investments that lack liquidity, the issuer must maintain a sufficient portion of its assets in liquid investments to the satisfaction of MERJ Exchange.

b) Reporting requirements for management transactions prescribed in LR54 are not applicable to an open-ended fund.

c) If an open-ended fund suspends redemptions, it should also suspend subscriptions unless the price based on NAV is still calculable through objective and reliable means.

d) The issuer must provide regular updates to MERJ Exchange during any suspension of NAV calculation or subscriptions/redemptions.

LR102 Exchange Traded Funds (ETFs)

a) Listing Requirements

i. Name

An exchange traded fund must include “ETF” in its name.

ii. Listing of ETFs

ETFs must be –

a. open-ended;

b. issued over and restricted to one or more underlying instruments permitted by MERJ Exchange pursuant to clauses iii. through ix.

c. fully covered/secured at all times either by the underlying securities, commodities, virtual assets or financial instruments it represents or a proxy security acceptable to MERJ Exchange which must be listed on a recognized exchange, freely tradeable and have adequate liquidity or cash.

iii. Permitted Equity and Debt Securities
Equity and debt securities, including other ETFs and ETPs, that are listed or admitted to trading on MERJ Exchange or on a foreign securities exchange recognized as having equivalent regulation are permitted as underlying instruments for ETFs.

iv. Permitted Derivatives
All derivatives listed or admitted to trading on MERJ Exchange or on an exchange recognized as having equivalent regulation are permitted as underlying instruments for ETFs.

v. Permitted Standardized Options and Futures Contracts
Standardized options and futures contracts traded on MERJ Exchange or on an exchange recognized as having equivalent regulation are permitted as underlying instruments for ETFs.

vi. Permitted Reference Rates, Commodities, and Virtual Assets
The following reference rates, commodities, and virtual assets may serve as underlying instruments of ETFs:

a. Freely Convertible Foreign Currencies
Freely convertible foreign currencies are permitted. Non-freely convertible currencies may be included only if redemptions in such currencies are prohibited.

b. Precious Metals
Precious metals, specifically gold, silver, platinum, and palladium are permitted.

c. Commodities
Commodities traded on recognized exchanges, with spot prices that are published are permitted.

d. Virtual Assets
Virtual assets subject to additional requirements laid down by Directive are permitted.

See also:

LR103 Real Estate Investment Entities

a) The operators must be independent of the independent valuer and, where applicable, any property manager and other advisors.

b) Operators and any third parties appointed to manage the assets must ensure compliance with these Listing Rules and other legal or regulatory provisions.

c) The investment policy must include a maximum of 80% leverage on any single property, a maximum of 60% average on all gross assets of the real estate investment entity and a ban on acquiring any property from a related party unless approved by a majority vote of the investors of the relevant class of shares.

LR104 Venture Capital Funds

a) The investment policy of a venture capital fund may provide for it to take legal control over the issuer of those investments. However, management control by an investment entity over such an issuer may not be taken. Any management influence must be confined to the provision of strategic advice and may not include involvement in the daily operations of that issuer.

b) A venture capital fund may appoint non-executive representatives to the Board of Directors of that issuer, provided that such representatives do not form a majority of the Board of Directors for voting purposes.

B. Special Purpose Acquisition Companies (SPACs)

LR105 General

A SPAC must meet the Main Standard except as modified by this Part B.

LR106 Listing Requirements

a) LR10 (Duration) and LR11 (Previous Annual Financial Statements) do not apply to a SPAC.

b) A SPAC has up to a maximum of three (3) years from the date of listing to complete a De-SPAC Transaction.

c) The SPAC's Articles must include provisions for liquidation after three (3) years if no De-SPAC Transaction has been completed.

d) IPO proceeds must be deposited in an escrow or trust account with an institution subject to the Financial Institutions Act or similar prudential supervision in a recognized jurisdiction.

e) Shareholders must be granted a redemption right for the shares issued in the IPO ("IPO Shares"), which may be limited to those voting against the De-SPAC Transaction.

f) The IPO Shares must be granted a liquidation preference over all other classes of shares up to the amount paid in the IPO.

g) Founding investors, sponsors, directors, and executive officers must enter into lock-up agreements extending at least six (6) months after the completion of the De-SPAC Transaction.

h) Except for convertible debt or warrants issued during the IPO, a SPAC may not raise funds through debt financing except for use in a De-SPAC Transaction.

i) A SPAC may not raise additional capital after its IPO and before a qualifying acquisition except through a renounceable rights offer to existing investors.

j) A SPAC may not have any prior written or oral agreement to acquire assets before its IPO but may be in discussions with potential acquisition targets.

k) Up to ten percent (10%) of the IPO Proceeds may be used to cover expenses specifically related to a De-SPAC Transaction.

l) Underwriters, if any, must agree to place one hundred percent (100%) of any cash-based commissions relating to the IPO proceeds into the escrow account until a successful De-SPAC Transaction is completed.

m) The company listed in the Standard for SPACs must submit a request for a change of regulatory standard no later than three (3) months after the completion of the De-SPAC.

See also:

LR107 Escrow Account

a) IPO proceeds must be held in an escrow or trust account under joint signatory control of the SPAC and a representative of the Sponsor Advisor or another independent party approved by the Listing Committee.

b) The IPO proceeds may only be used for purposes described in the prospectus, specifically the acquisition of one or more acquisition targets, repurchase of IPO Shares in connection with the De-SPAC, repayment of IPO Shares upon liquidation, coverage of stamp duty or taxes on the purchase of IPO Shares, and banking charges, but not for operating costs.

c) Until used in accordance with paragraph b), the proceeds may only be held as bank deposits or short-term investments with low risk of price fluctuations.

d) Any outward transactions from the escrow account require joint authorization from both the issuer and its Sponsor Advisor or other approved independent party.

LR108 Continuing Obligations

a) Disclosure of Management Transactions

In addition to the members of the Board of Directors and the executive committee, sponsors and founding shareholders of the SPAC are also deemed to be persons subject to the reporting requirements of LR54 para. a).

b) De-SPAC Transaction

a) The SPAC must prepare and publish an information document in view of the vote on the De-SPAC Transaction.

b) An independent body, such as a recognized accounting firm, must review the appropriateness of the offer, particularly the valuation of the acquisition target, and prepare a report to be published in the information document.

c) The independent body must be independent of the SPAC, the De-SPAC target(s), and persons acting in concert with them.

d) Shareholders holding the IPO Shares must approve the De-SPAC Transaction by a majority vote at a special meeting.

e) The IPO proceeds in the escrow account may only be used for the purposes described in the prospectus, not for operating costs.

LR109 Ongoing Obligations After the De-SPAC

a) Quarterly Reporting

a) Notwithstanding Art. 50 para. 2 regarding interim reporting, the issuer is required to publish quarterly financial statements in accordance with the applicable accounting standards, unless the target has financial reporting for three financial years in accordance with a recognized financial reporting standard at the time of the De-SPAC.

b) Quarterly financial statements must be prepared for a maximum of two full financial years.

c) Quarterly financial statements must be prepared for the first full quarter following the De-SPAC.

b) Publication of Quarterly Financial Statements

Quarterly financial statements must be published no later than three months after the end of the reporting period.

c) Disclosure of Management Transactions

Until one month after the end of the lock-up period, in addition to the members of the Board of Directors and the executive committee, sponsors and founding shareholders of the SPAC are also deemed to be persons subject to the reporting requirements of LR54 para. a).

LR110 Liquidation and Delisting

a) If the SPAC fails to complete a De-SPAC Transaction within the prescribed time frame, it must distribute all funds held in escrow on a pro-rata basis to the IPO investors.

b) The SPAC will be delisted by MERJ Exchange on or shortly after the date the distributions are completed.

C. Depository Securities

LR111 General

This Section C lays down the requirements for Depository Securities.

LR112 Scope

The requirements in this Section C cover all Depository Securities except for Depository Securities issued over certain international securities listed on a recognized securities exchange and recognized mutual funds.

See also:

LR115 Requirements of the Issuer of Depository Securities

The issuer must be –

a) an approved securities facility or its nominee; or

b) a Depository licensed in a recognized jurisdiction..

LR116 Requirements of Underlying instruments

a) Eligibility

i. The requirements of LRs 18 to 26 must be met for underlying securities.

ii. Underlying instruments other than securities are limited to those specified in LR102 iii., iv and clauses a to d of para. vi.

b) Fiduciary Holding and Investor Protection

The depository agreement must –

i. ensure fiduciary holding of the underlying instruments by the Depository or Depository Nominee for the benefit of investors;

ii. allow for segregation of the underlying instruments in cases of insolvency or restructuring of the Depository or Depository Nominee; and

iii. oblige the Depository or Depository Nominee to provide information to MERJ Exchange upon request with all information and documentation connected with the implementation of the depository agreement as well as information relating to the number of underlying instruments deposited and Depository Securities issued.

LR117 Requirements of the Depository Securities

LRs 18 to 26 apply mutatis mutandis to Depository Securities except for the LR 20 (Free Float).

2. Listing Obligations

LR118 Listing Obligations

Except as otherwise stated in this Section 2, LRs 27 through 45 apply mutatis mutandis to Depository Securities.

LR119 Initial Disclosure Requirements

a) Underlying Equity and Debt Securities

i. Initial disclosures must include all information and supporting documents of the underlying issuer and the underlying securities as if there were no Depository Securities.

ii. Additional prescribed information and supporting documentation relating to the Depository and Depository Securities must also be provided.

See also:

b) Underlying Currencies, Precious Metals, Commodities and Virtual Assets

The Listing Particulars or an equivalent information document must include prescribed information about the issuer of the Depository Securities, the Depository Securities and the underlying instrument.

See also:

LR121 Depository Agreement (Underlying Securities)

a) There must be a depository agreement between the issuer of the Depository Securities and the issuer of underlying securities, setting out the rights and obligations of the parties and the holders of the Depository Securities.

b) The depository agreement must be governed by the laws of Seychelles or a recognized jurisdiction acceptable to MERJ Exchange.

LR122 Custody Arrangements (other Underlying instruments)

LR 88 e) through i) applies mutatis mutanda to Depository Shares issued over underlying instruments that are not securities or where underlying securities are held indirectly through a custodian.

LR123 Suspension and Delisting

MERJ Exchange may suspend or delist Depository Securities in accordance with these Listing Rules if the issuer or the Depository fails to comply with the applicable requirements.

D. Periodic Liquidity Option

LR124 General

The Periodic Liquidity Option allows issuers to list securities on MERJ Exchange with trading restricted to specific, pre-determined liquidity windows, rather than continuous trading.

LR125 Eligibility

To be eligible for the Periodic Liquidity Option, an issuer must meet the listing requirements applicable to the Basic Standard except as modified by this Part D.

LR126 Liquidity Windows

a) The issuer must specify in its Listing Particulars the frequency and duration of regular, periodic liquidity windows during which trading of its securities will be permitted.

b) The issuer must designate at least one liquidity window per calendar quarter.

c) Each liquidity window must be open for at least a full trading day.

d) Any changes to the frequency or duration of the liquidity windows must be approved by MERJ Exchange and communicated to investors in advance.

e) The issuer may facilitate trading during the liquidity windows through tender offers, auctions, or other mechanisms approved by MERJ Exchange.

See also:

LR130 Termination

MERJ Exchange may terminate the issuer's participation in the Periodic Liquidity Option if the issuer fails to comply with the requirements of this Part D or to protect investors or maintain market integrity.

X. Final Provisions

A. Entry Into Force

LR131 Entry Into Force

The original Listing Rules were approved by the FSA on 12 May 2012.

This comprehensive update of the Listing Rules enter into force from 1 January 2026.

B. Transitional Provisions

LR132 Listed Companies Transition

a) Current listed issuers will transition to the new listing standards as follows:

i. VCAP Board will be required to meet the Basic Standard going forward.

ii. SME Board will be required to meet the General Standard going forward.

iii. Main Board will be required to meet the Main Standard going forward.

iv. Investment Entities will be required to meet the Standards for Investment Entities going forward.

v. Issuers on the Debt Board will be required to meet the Standards for Bonds going forward.

b) Any new requirements in Section II A. (Listing Requirements) and any special additional provisions in Section IX. (Special Additional Provisions) according to the applicable listing standard must be met within six (6) months of the Entry Into Force of these updated Listing Rules. The Listing Committee may grant an extension for a maximum of another three (3) months on request supported by a well-founded justification.

LR133 Interim and Annual Reporting

Section III A (Interim and Annual Reporting) of these updated Listing Rules will apply to all reporting periods starting from those ending on 31 March 2026 and later. Reporting requirements for any period completed prior to 31 March 2026 are unaffected by these updated provisions.

LR134 Other Duties to Provide Information

Section III B (Other Duties to Provide Information) will apply within thirty (30) days upon Entry Into Force to all companies listed on MERJ Exchange.

LR135 Corporate Governance

The requirements in Section III C (Corporate Governance), specifically LR57, LR58, and LR59 or as otherwise modified by Section IX must be met by all listed companies according to the applicable listing standard within six (6) months of Entry Into Force.

LR136 Securities Already Listed

a) Securities that are already listed on MERJ Exchange will remain listed.

b) Unless stated otherwise in these transitional provisions, all provisions of these updated Listing Rules shall apply to issuers of securities that are already listed, effective from Entry Into Force.

LR137 Pending Sanction Proceedings

a) Sanction proceedings that are ongoing at the time of Entry Into Force will be conducted in accordance with the previous provisions.

b) Sanction proceedings initiated after Entry Into Force will be conducted under the previous provisions if the actions or omissions in question occurred prior to Entry Into Force.

LR138 Pending Listing Applications

a) Listing applications submitted prior to Entry Into Force will be reviewed and processed according to the previous provisions.

LR139 New Listing Applications

a) For listing applications submitted after Entry Into Force, applications will be reviewed and processed according to the new provisions.