Year in review
The activity of ISX-listed shareholding companies was heavily impacted by those novel working conditions. Their responses varied between reacting to the evolving changes by implementing computerization and utilizing technological means on one side and inability to take action on the other. Within its efforts to address the situation of those companies suspended from trade for not providing their financial statements, the ISC issued the official letter No. 157/2 on Dec 17 that included:
1.Allowing these companies, suspended on the grounds of not providing their financial and annual disclosure statements, to resume trading within three months if they commit to:
a.Disclose the requested financial statements for previous years until 2019.
b.Pay the fine provided for non-compliance, regardless of the suspension period.
2. In case of not meeting the abovementioned disclosure requirements, the Commission will use its authority to delist these companies from the ISX.
These measures were followed by other ones made by the Iraq Securities Commission in its official letter No. 1509/2 on Dec 24 which calls for:
1.Granting shareholding companies, a financial reporting exemption for the period between Feb 20 and Dec 5, which was declared a "force majeure" one in the official letter No. 22437 issued by the Iraqi General Secretariat of the Council of Ministers on Dec 5.
2.Setting the deadline for submission of the 2019 financial statements, as required by the relevant law and instructions, after expiration of the extension period.
3.Allowing suspended companies to resume trading their shares after expiration of the extension period and paying the abovementioned non-compliance fine, provided the soundness of their legal situations.
4.Obliging companies to submit their 2020 financial statements within the deadline referred to in the
Order No. 74: Interim Law on Securities Markets of
2004, and the instructions being issued accordingly.
At the international level, the Iraq Stock Exchange was elected as a member of the Committee for the Development of the Business Rules of Arab Capital Markets for the period from November 2020 to November 2022, in addition to a number of Arab financial markets.
Numerous trading indicators materialized in the course of the passing year, the most notable of which are:
The plans that formulated by the Exchange for 2021 that involve maintaining collaboration with the Iraq Securities Commission, Central Bank of Iraq, and Ministry of Trade's Registration of Companies Department (Tasjeel) to update and revise trading instructions, to follow up on situation of suspended companies and address their problems, to list new shareholding companies, to diversify financial instruments which are currently limited to ordinary shares, and to study proposals to increase working hours and organize evening sessions.
Furthermore, the Iraq Stock exchange aims to strengthen its technical and oversight efforts in holding trading sessions, executing settlement and clearing processes, ensuring inspection and oversight, monitoring sessions, promoting quarterly, annual and significant events-related disclosures, implementing technical, information and electronic systems development, adopting financial inclusion by the launch of an online trading project, disseminating reports, statistics and ISX-Listed Shareholding Companies Guide, reaching out to news outlets, holding virtual workshops for investors and shareholders, spreading a culture of share trading, training students, and improving its digital identity.
Equally noteworthy are the efforts that led to the establishing the Iraqi Company for Deposit Insurance (ICDI), as a mixed shareholding entity, thus to move forward towards creating confidence in the national banking sector. Last February, the CBI called private banks to "publish integrated analyses of the bank's quarterly and annual financial results on its website, within a section called 'Investor Relations,' for the ease of access by shareholders and others concerned. The section should at least include:
Quarterly and annual financial reports, comparative analyses of financial statements, the top 20 shareholders (at the minimum) and the percentage of their ownership, analyses of key performance indicators, the general assembly's meeting minutes and decisions, and the volume of traded shares and their market values.
The Central Bank of Iraq requested compliance of the private banks with these instructions by the end of the second half of 2020",-Taha Ahmed Abdulsalam