Tehran Stock Exchange
The TSE is Iran’s first and largest equity market. Launched in February 1967, TSE listed six companies initially and later on accompanied by other financial instruments such as treasury bonds and certain state-backed certificates.
As of today, TSE is the pioneer market in Iran with more than 330 listed companies from 40 diverse industries (as of January 2020). The Market Act, ratified in November 2005, restructured Iran capital market, resulting in the establishment of the Securities and Exchange Organization as the supervisory body and the TSE as the equity market. TSE previously known as “Brokers Organization” used to be a mutual non-governmental public organization whose board members were mainly appointed from brokerage firms; however, since 2006, it has turned into a demutualized exchange, self-regulatory public joint-stock corporation.
| Trading Model |
| Legal Structure | Public Corporation (Self-listed) |
| Status | Self-regulatory (under SEO’s supervision) |
| Trading Venue | Tehran (+1500 trading access points nationwide) |
| Trading Days | Saturday to Wednesday |
| Trading Hours | 8:30 to 9:00 (Pre-opening) 9:00 (Opening based on Theoretical Opening Price) 9:00 to 12:30 (Continuous auction) |
| Trading System | Automatic Trading System (ATS), Order-Driven |
| Trading Mechanism | Opening auction, Continuous trading |
| Securities | Equity Shares and right offerings, Sukuks, ETFs, Embedded Put option, option, Futures |
| Order Priority | Price, time |
| Market Making / Liquidity Providing | ETFs, Sukuk (Mandatory) Other Securities (Elective, unless listed since 2017) |
| Daily Price Fluctuation Limit | Shares (±5%), Right offerings (±10%), Bonds (±5%), Futures (±5%) |
| Available Real-Time Data | Prices (open, close, high, low), three best bids & asks, indices, Companies’ data |
| Close Price Calculation | Weighted average based on reference volume |
| Foreign Investment | Allowed |
| Equity Trading Commission (buy+sell) | %0.939 + %0.5 transaction trading tax payable by seller |
Incentives
The macro-economic policy of Iran has always been to incentivize companies and their commodities to be listed in exchanges. To achieve so, the Iranian authorities have eased and facilitated the act of investment in various ways, one of which is tax relief regulations. The items below are noteworthy in this regard.
· TSE’s listed companies are eligible to 10% tax relief (the rebate would be doubled if the amount of free-float shares exceeds 20%);
Listing
| Requirements | First Market | Second Market |
| Main Board | Secondary Board |
| Registration with SEO | √ | √ | √ |
| Public Joint-Stock Co. | √ | √ | √ |
| No Accumulated Loss | √ | √ | √ |
| Positivity of Last Two Years’ Accumulated Operational Cash Flow | √ | √ | √ |
| Profitability of the Last Fiscal Year | √ | √ | √ |
| Audited Financial Statements for Last Fiscal Year | √ | √ | √ |
| Minimum Market Capitalization[1] (million USD) | 28.5 | 14 | 6 |
| Minimum No. of Shareholders | 1000 | 750 | 250 |
| Minimum Free-Float Shares (%) | 20 | 15 | 10 |
| Minimum Activity Record (Years) | 3 | 3 | 3 |
| Minimum Profitability Periods (Fiscal Years) | 3 | 2 | 1 |
| Equity to Asset Ratio (%) | 30 | 20 | 15 |
Settlement
| Settlement Time |
| Equity, Derivatives, ETFs | T+2 |
| Fixed- Income Securities | T+1 |