26/02/2014 /

An Introduction to the New Channel Islands Securities Exchange

The restructuring of the Channel Islands Stock Exchange by way of a scheme of arrangement was approved by the Royal Court in Guernsey on 20 December 2013. The new structure sees the exchange authority handling day-to-day operations separated from a parent company marketing the exchange and setting strategy.

The scheme of arrangement designates the new Channel Islands Securities Exchange Authority Limited (CISEAL) as the operator of an investment exchange authorised by the Guernsey Financial Services Commission.

International recognition:

CISEAL has received the following international recognitions and memberships:

  • Designation as a recognised stock exchange by HM Revenue & Customs under section 1005 (3) of the Income Tax Act 2007 and, with effect from 20 December 2013, the market will also be regarded as a recognised stock exchange for Inheritance Tax purposes
  • Recognised stock exchange status by the Australian Securities Exchange
  • Membership of the International Capital Markets Services Association; and
  • Affiliate membership of IOSCO

An application to the US Securities & Exchange Commission for Designated Offshore Securities Markets status has been made with a response anticipated shortly.

Securities previously listed on the CISX

All securities listed on the CISX have automatically been transferred to listing on the Official List of the Channel Islands Securities Exchange (CISE). Issuers maintaining listings are subject to the listing rules of the CISE together with any other law, rules, regulations or requirements applying to such issuer

New applications

Any new applications for listings will be submitted to the CISE.  If an application was submitted but the securities were not listed by 20 December 2013 then a fresh application, based on the new rules, has been deemed to have been made to CISE.

Changes to the listing rules

  • The only significant changes to the listing rules for issuers and their advisers are in respect of specialist debt securities under Chapter 8 of the listing rules:
    New issuers of debt securities will be required to have audited accounts covering a period of at least three years, audited by an independent auditor and prepared in accordance with the issuer's relevant applicable law and accounting standards. The accounts should be for the issuer and consolidated where the issuer has subsidiaries. For newly formed (e.g. SPV) and certain other types of issuers, the requirements to produce accounts will generally be waived, (in whole or in part) by the CISE.
  • A declaration and undertaking signed by each director and proposed director or the principals of any corporate director must be submitted as part of the initial application documents.  Each director must also supply a 10 year employment history and give certain other confirmations, as required by the CISE.
  • In the case of an issuer, any of whose securities are already listed, the same declaration(s) need only be submitted for each director if specifically requested by CISE as part of a supplemental issue transaction (excluding PIK listing applications).
  • Other than these changes, there are no material differences between the existing CISX listing rules and the new CISE listing rules.

It is our understanding that an issuer with securities already listed does not need to take any further action.  Under the CISE listing rules, issuers will be subject to the same continuing obligations as those which applied prior to the restructuring.

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