Frequently Asked Questions

Question 1.
What are the trading hours at Tehran Stock Exchange (TSE)?

Answer:

For Cash Market: Preopening 8:30 – 9:00, Trading 9:00 to 12:00
For Futures Market: Trading 9:00 to 12:30
These hours are effective Saturdays to Wednesdays, except public holidays .

Question 2.
What is TSE?

Answer:

Tehran Stock Exchanges (TSE) is the first and biggest stock exchange in Iran. Tehran Stock Exchange was established in 1968. In 2005, the new Capital Market Law of Iran was approved by the parliament, and in 2006, according to this act, TSE was demutualized and reestablished as a joint stock company with over 6000 shareholders and a seven-member board .

Question 3.
What types of securities are listed and traded on TSE?

Answer:

There are four types of securities traded in TSE: common shares, rights, derivatives (single stock futures) and bonds.

Question 4.
How can I buy shares or invest in the stock market?

Answer:

For trading at TSE, one must choose a member firm (broker) to trade through it. Using TSE Trading System, your stockbroker will buy or sell shares based on your instructions. Currently, there are 88 member firms operating at TSE. They get their license from Securities and Exchange Organization (SEO) .

Question 5.
Can I trade listed shares over the internet?

Answer:

Yes. There are some brokers who offer on-line trading service. Any order that you place over the internet will be routed to a TSE member who will then reroute it to TSE market.

Question 6.
What is a trading halt?

Answer:

Trading Halt is used when there is any information that is considered likely to materially affect investment decisions and SEO and TSE deem it necessary to disclose that to the public. Also, trading is halted two days before general assembly of listed companies .

Question 7.
What are the Council and SEO?

Answer:

The Securities & Exchange High Council (Council) and the Securities and Exchange Organization (SEO) are regulators and supervisors of the Iranian capital market .
The Council is the highest authority and is responsible for all related policies and market strategies of the market. The Chairman of the Council will be the Minister of Economy & Finance; other members are: Minister of Commerce, Governor of the Central Bank of Iran, President of the Chamber of Commerce, Attorney General, Chairman of SEO, representatives of the active market associations, three financial experts introduced by the Minister of Economy & Finance and approved by the Cabinet, and one representative from each Exchange .
The SEO will be responsible for supervisory and regulatory duties, governed by the Board of Directors. The Organization's Board of Directors will be elected by the Council .

Question 8.
Are any foreign companies listed on TSE?

Answer:

So far, no. Just Iranian companies are listed at TSE . However, there is no prohibition for that.

Question 9.
What is "Daily Price Fluctuation Limit?

Answer:

In order to maintain a stable stock market, the daily price fluctuation limit of stocks, and participation certificates are set at 4% of the closing price of the preceding business day. For rights the limit is set at 8% .

Question 10.
Is there a special mechanism for trading newly-listed stocks (in IPO)?

Answer:

Yes, newly listed stocks are sold via an auction method; buyers place their order in different price with a broker who input the orders into the trading system. The seller offers the shares at the price which the greatest orders placed in that price. The seller offers 5 - 10 percent of the share in the first session. Daily price limits can only come into effect the day after the IPO .

Question 11.
In what priority orders are sorted in trading system?

Answer:

During auction trading, priority among orders is decided on two principles ; price and time priority, to ensure that all orders are handled equally and transactions proceed smoothly .
Under the price priority rule, a selling (buying) order with the lowest (highest) price takes precedence. Under the time priority rule, an earlier order takes precedence over others at the same price .

Question 12.
What is settlement, and how does it work?

Answer:

Settlement is the transfer of funds and securities between buyer and seller once a transaction has been agreed upon. Currently, settlement for trades executed on the TSE market takes place on the 3rd business day after the transaction - often referred to as T+3. Central Securities Depository of Iran (CSDI) acts as central counterparty to settlement, so that funds are transferred between members (broker) and CSDI and securities transferred between client accounts. Transactions are settled by book-entry transfer between accounts .

Question 13.
What is CSDI?

Answer:

Central Securities Depository of Iran (CSDI) is a public company, which handles the clearing and settlement operations, and also acts as the Central Depository for all securities in Iran. The main shareholders of CSDI are TSE, banks and member firms .

Question 14.
Is it possible for me to open several accounts with different brokers?

 

Answer:

Yes, it is possible to have several trading accounts with more than one broker; however, the trading permit (code) is unique for each person.

Question 15.
Is it the TSE's requirement that all common shares should pay dividend?

Answer:

If the company has made a profit, the distribution of at least 10 percent of the annual profit among the shareholders is obligatory. Paying more than this rate depends on the resolution of the general assembly of the company .

Question 16.
How can I get a disclosure of a company listed on TSE?

Answer:

Annual, semi-annual and quarterly reports and any information that could affect stock process have to be submitted to the SEO on a regular basis by every listed company. These reports and other financial statements are stored in the SEO library and are available to the public. Besides, SEO has implemented a network: CODAL (www.codal.ir), through which information affecting the price will be issued directly. All the information is free by now .

Question 17.

A. Are capital gains and dividends exempt from taxes?
B.  Can foreign citizens trade with stocks on Tehran Stock Exchange?
C.  Is there any Iranian Company noted on any foreign market places?

 

Answer:

A. Yes, capital gains and dividends are tax free for both Iranians and foreign investors .
B. Yes, but there are some limitations. Please refer to Foreign Investment section
C. No .

Question 18.
What type of Market Data do TSE offer and how is it distributed?

Answer:

For price and other stock market information, investors can rely on the following sources: stockbrokers, Tehran Stock Exchange, media (newspapers, television and radio), and information service companies .
In addition, the TSE's Market Department (statistics section) issues statistical Weekly and Monthly reports and Fact Book in a regular basis. These contain among others, trading statistics, the composite index and sectorial indices, market capitalization of listed companies, volume and value traded. These publications are available at the TSE's website. All these information are free by now .

Question 19.
Can I trade with a TSE's broker through internet? Does Iran have online stock trading with streaming quotes to the Tehran Stock Exchange?

Answer:

Yes. There are some brokers which offer online trading services. Any order that you place over the internet will be routed to a TSE member who will then reroute it to the TSE market .

Question 20.
I would like to know if there are any mutual funds or exchange traded funds available to be bought on international exchanges that have an exposure to Iran.

Answer:

No

Question 21.
Do you trade crude oil at TSE?

Answer:

No. but one can trade petrochemical products at Iran Commodity Exchange .

Question 22.
Are Futures and Options offered in the stock exchange? If not, when do you plan to introduce them?

 

Answer:

Futures market launched from August 2010 on the shares listed at TSE.  But option is going to be listed until the end of 2012.

Question 23.
Which method is being used for calculating TSE's indexes?

Answer:

Various indices are calculated in TSE such as price index (TEPIX) and Dividend index (TEDIX), Price and Dividend index (TEDPIX), index of 30 blue-chips, and free float index. In addition, indexes of 37 industries are also calculated. All of them are capitalization weighted indexes.

 

Question 24.
Is it possible for foreign investors to trade in Teheran Stock Exchange?

Answer:

People from other countries can invest in Tehran stock Exchange. Foreign investors can invest in TSE, directly or indirectly (mutual funds) by intermediation of TSE's members