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General Information on the IGC Sector

The goals of the project for creating the Innovation and Growth Companies Sector (IGC Sector) are the formation of conditions that allow small and medium-sized companies to effectively attract investment in innovative and rapidly growing sectors of the economy, the creation of conditions allowing for numerous IPOs of such companies, and the promotion of venture financing in the Russian Federation.

Since June 27th, 2006, a new version of the Listing, Admission, and Circulation Regulation has been implemented in the MICEX SE. Registered by the FSFM of Russia on June 15th, 2006, it provides for the foundation of the Innovation and Growth Companies sector. The new version of the Regulation also establishes the requirements imposed on the mechanisms for admitting securities for issuance and circulation in the IGC sector and special features of such mechanisms.

According to the new version of the Listing Regulation, the IGC sector is established within the framework of the existing structure of the traded securities list; that is, issuance of securities in the IGC Sector is supposed together with their inclusion on a Quote List or in the Non-Listed Securities Register with access to circulation in the IGC Sector.

The following criteria for an issuer’s membership in the IGC sector have been determined by the Listing Regulation:

  • A major portion of the issuer’s proceeds must result from economic activity in areas connected with the use of innovative and high technology.
  • The issuer’s market cap cannot be less than 100 million rubles and cannot exceed 15 billion rubles.

The issuer’s compliance with the first criterion is determined by the MICEX SE Expert Council, which consists of specialists with experience in working with high tech companies. Priority will also be given to the following companies:

  • Companies operating in the following spheres: telecommunications, Internet business, software development and installation, development and production of semiconductor devices, biotechnologies, research and development, science-intensive manufacture of products in the machine-building and transport industries, companies operating in sectors related to the implementation of national projects;
  • Companies with growth rates of more than 20% as of the end of the financial year.

This Sector has stricter requirements concerning information disclosure; in addition to standard (for Quote Lists and the Non-Sisted Securities Register) documentation and the data and information set, the company will be obliged to provide investors with the following additional documents:

  • An investment memorandum disclosing information on the company’s financial and economic activity in a more detailed and informal manner compared with the strictly determined standards that are applied to the issue prospectus and issue resolution (information must be provided upon issuance in the Sector);
  • A corporate calendar disclosing the main events of the issuer’s company to investors.

To increase the IGC Sector companies’ level and quality of transparency of, Listing Agents have been introduced. A Listing Agent is an organization complying with the requirements set by the MICEX SE Directorate that has concluded an agreement with the issuer (management company) for providing services including preparing the set of documents needed to admit securities for issuance and circulation in the IGC Sector of the MICEX SE. Listing Agents may also perform additional functions, including financial consulting and controlling the issuer’s disclosure of information while maintaining its securities in the IGC Sector. The institution of Listing Agents will ensure that investors’ rights are protected and minimize the risk of disseminating unreliable data and information.