Frequently asked questions for issuers

• it is a market for trading shares of the largest and most prestigious companies on the Prague Stock Exchange (blue chips)
  
• Issuers of shares on the Prime Market are perceived as leaders in their fields
• above-standard interest in issuers from the media and the professional public
• the market is also followed by major foreign investors

• legal form of a public limited company or European company (SE), or similar legal form under foreign law
• book-entry of shares in a domestic or foreign central depository
• the transferability of the accepted shares may not be restricted in any way
• the prospectus of the security is published before admission to the market
• a sufficient proportion of the accepted issue owned by the investing public
• meet the statutory reporting requirements in International Financial Reporting Standards (IFRS)

In the case of the legal rules of the official market, firms must meet the following legal criteria, among others:

• market capitalisation of the issue EUR 1 000 000
• the part of the emission that is dispersed among the public (free-float), at least 25%
• existence of the issuer for at least 3 years

• application for admission and signed framework agreement between the issuer and the exchange
• prospectus of the security
• proof of the allocation of the ISIN or similar identification code and proof of registration of the issue by the central depository
• extract from the commercial register or similar foreign register
• the memorandum or articles of association of the issuer or an equivalent document under the law of the issuer's home state
• if the issue is governed by the legal conditions of the official market, also the annual accounts for the last 3 years

Samples of applications, contracts and other relevant documents will be provided by the Exchange upon request. Previously published prospectuses are archived in the register of the relevant regulator.

The admission of an issue of shares to the Prime Market is decided by the so-called Listing Committee of the Prague Stock Exchange established for this purpose. The decision on admission is issued within 15 working days of receipt of a complete application for admission.

A company may enter the Prime Market by way of an Initial Public Offering ("IPO"). The entire transaction is arranged and managed by an "Issue Manager", an experienced external qualified advisor engaged by the company. The service also includes communication with investors and the provision of an order book, which is a system for collecting instructions from individual investors. Once the public offering is completed, the issue manager, in cooperation with the issuer, determines the subscription price. The transaction may also include an over-allotment option, called a green shoe option, which allows the transaction manager to subscribe for additional shares and provide additional price stability for the shares after the subscription. A lock-up period, i.e. a prohibition on the sale of shares of major shareholders within a predetermined period after the IPO, may also be used to provide price stability.

Alternatively, a company may enter the Prime Market through a direct listing. The company does not hire a transaction manager and does not set the price of the listing. Existing shareholders already sell their shares on the stock exchange. The opening share price is set in the first open introductory auction. Price stabilization tools are not used.

After the initial public offering, the IPO, is completed, the subscription will be settled by the central depository. This means that the new shareholders will receive their shares and the company will receive the funds. At the same time, existing shareholders who decide to sell their shares in the IPO will also receive funds. Settlement will take place at the same time and the issuer's shares will start trading on the stock exchange the following business day.

Settlement of newly subscribed shares may take several days, and therefore, it is possible to start conditional trading for Prime Market shares up to 10 days before the start of regular trading. The issuer must request conditional trading.

The Company is obliged to publish on its website and at the same time send various documents and information via the electronic stock exchange application. For example:

• calendar of information obligations
• the audited annual report or consolidated annual report within 4 months after the end of each financial year
• a half-yearly report within 3 months of the end of the first 6 months of each financial year
• a declaration of subscription to the code of corporate governance to which the issuer subscribes
• invitation to the general meeting and minutes of the general meeting
• information on changes to the company's articles of association
• information on changes in the number of shares in issue, nominal value, etc.
• information that may cause a significant change in the share price

The issuer must comply with the information obligations outside trading hours. The above points are not an exhaustive list of obligations.

Please refer to the Prime Market Rules for details.

Issuers do not pay any fees to the exchange upon entry to the Prime Market and in the first year of trading. In subsequent years, they pay an annual fee for trading the issue of 0.05% of the market capitalization of the share issue traded, with the annual fee reaching a maximum of CZK 300,000. If new shares are issued that are fungible with shares already admitted to the Prime Market, the issuer pays a fee of 0.05% of the value of such newly issued shares, again limited to a maximum of CZK 300,000.

Detailed information is provided in the Fee Schedule.

Market makers are the members of an exchange who increase the liquidity of securities trading by quoting, i.e. setting the bid and ask prices of securities of their choice. A market maker has a contract with the exchange to carry out such activity. The exchange maintains a register of market makers. Companies on the Prime Market should have a market maker.

Only actively traded "blue chip" equity issues are included in the PX Index. The market capitalization of the issue must be greater than CZK 0.5 billion or the average daily trading volume of the issue exceeds CZK 2 million in the relevant period.

At the same time, the issue must be traded on at least 90% of the trading days during the relevant period on which it is admitted to trading on the exchange.

Detailed information can be found in the Rules for calculating the PX, PX-TR and PX-TRnet indices.