Tehran Stock Exchange was established in 1968, and has been the primary equities market in Iran. In
2005, the new Capital Market Law of Iran approved by parliament and in 2006, according to this Act,
TSE was demutualized and established as a joint stock company with over 6000 shareholders and sevenmember
board that include: brokers, financial institutions and individuals. TSE has enjoyed a reputation
for having maintained an orderly market and a cost-effective trading capability since its inception.
The fully computerized trading system has helped boost the trading capacity and efficiency of the stock
market. In 1994 electronic trading systems was launched. In 2007, TSE moved to the powerful trading
system (powered by Atos Euronext) for meeting the high trading volume.
TSE has been awarded quality system certificate of ISO9001; in 2009 and also planned to obtain
ISO27001 certification for its IT Security Management System.
TSE has implemented many reform measures in the past few years in order to bring it in line with
international practice, and to better reflect investors’ diversified needs. TSE is set to continue making
progress towards liberalization and internationalization.
The Tehran Stock Exchange, with its fully automated trading systems and book entry mechanisms, is
known as one of the most active exchanges in the Middle East region. At the end of June 201, the total
market capitalization of the 342 companies listed on Tehran Stock Exchange (TSE) amounted to US$105
billion. The ratio of total market capitalization to GDP was abuot 26 % in 2010. In this year, the total
trading value was US$19 billion, representing a market turnover rate of 22.5%. The market P/E ratio of
the Tehran market was 6.7, lowest among primary WFE1 exchanges, making it an attractive marketplace
In order to enhance the core competitiveness of the Tehran Stock Exchange and to make faster progress
towards liberalization and internationalization, the authorities have also promoted the introduction of
new financial products, new financial institutions and implemented many reform measures, such as the
listing of Single Stock Futures (SSF), relaxing limitations on foreign investment, streamlining foreign
registration procedures, and adjusting various trading system and mechanisms so that they are more in
line with international standards.
TSE witnessed four periods in its lifetime:
A) Since the beginning of TSE activity until revolution (1967-1978)
In the period of 1967 to 1978 the number of listed companies and their capital raised from 6 with IRRs
6.2 b to 105 (22 private banks, 2 insurance companies, and 81 industrial corporations) with IRRs 240 b.
In 1967 the value of shares and bonds traded in the TSE, was IR 15 m, which increased to IRRs 34.2 b in
Actually, most of this development activity was due to the ratification of ownership development of
manufacturing units’ stocks and tax exemption for the listed companies’ laws.
B) Since revolution until the end of imposed war:(1979-1988)
In the second period of TSE activities, two important events i.e. the Islamic revolution and Iraq’s
invasion were reduced exchange activities severely and exiting number of listed companies from TSE. In
1978 the value of shares traded was reduced to IRRs 4.1 b and this trend continued to 1982 and reached
IRRs 9 m. From 1982 the trend of shares value increased and finally at the end of the period reached
IRRs 9.9 b.
c) Since the end of imposed war until now (1989-2006)
In fact, TSE was taken into account as one of the most important executive mechanisms for national
economy optimization in order to facilitate the equipment and active contribution of the private sector in
the productive activities through transferring some of the state duties to the private sector, gathering and
errant savings, all to be directed toward investment.
In 1989, economic authorities’ attention to restarting of TSE activities increased the number of listed
companies from 56 in 1988 to 422 in 2006. Furthermore, in 1988 the annual value of shares traded in the
TSE, was IRRs 9.9 b, which increased to IRRs 44.8 b in 2006. During this period, especially between
2001 -2004, return of TSE investments grown up considerably and in 2003 reached to 131.4% which on
that year was the highest return between WFE’s members.
The fully computerized trading system helped boost the trading value and efficiency of the stock market
in this era. In 1994, the electronic trading system was launched.
In 2002, TSE launched its first trading floors in a few provinces based on its Physical Development Plan.
The plan carried on, and by 2005, there were 21 trading floors across Iran.
World Federation of Exchanges
D) After ratification of new Capital Market Law (since 2006)
In December 2006, the new “capital market law” was passed by parliament to meet to the needs of new
market securities. After the new law went into effect, a new structure was formed for the Iran capital
market that separated the supervisory and regulatory body from the executive body.
Another important event was privatization according to the policies under article 44 of the Iranian
Constitution. It was a milestone on the Exchange’s activities and its development. This extended the
operations, market size and trading volume.
Based on the new law, Iranian capital market underwent some reform and restructuring. Securities and
Exchange Organization (SEO) was established as the local market’s regulator.
Moreover, Tehran Stock Exchange was demutualized and reestablished as a public joint stock company
with over 6000 shareholders.
The outstanding feature of this era was the establishment of new institutions in capital markets such as
investment banks, advisory companies, mutual funds. All those play a vital role in financing the projects
and supporting the entrepreneurs.
In 2007, Tehran Stock Exchange moved to the powerful trading system (JAM) for meeting the high
During the last decade, Tehran Stock Exchange’s Indicators reached an unprecedented point. Return
indicator of Tehran Stock Exchange has grown an average of 30 percent since 2001, despite that in
2005 and 2006, Tehran Stock Exchange experienced recession due to big growth in 2003 and 2004.
Also, Tehran Stock Exchange’s total market capitalization reached a record high in March 2011 when
it surpassed $ 112 billion. Tehran Stock Exchange was placed among the world’s top 10 stock
exchanges in terms of the growth rate of many indices in 2009 and 2010.
FAR Law Firm