Channel Islands Stock Exchange – Restructuring Update

December 23, 2013

Guernsey scheme of arrangement

We are pleased to confirm that we now have confirmation that the restructure of the CISX by way of a scheme of arrangement was approved by the Royal Court in Guernsey last Friday.

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

International recognition: is CISE an approved exchange?

CISE has received the following international recognitions and memberships:

  • designation as a recognised stock exchange by HM Revenue & Customs under section 1005 of the Income Tax Act 2007
  • 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 and a response is anticipated shortly.

What will happen to Issuers whose securities are already listed on the CISX?

All securities listed on the CISX have automatically been transferred to listing on the Official List of the CISE. Issuers maintaining listings shall be subject to the listing rules of the CISE together with any other law, rules, regulations or requirements applying to such issuers.

Ogier Corporate Finance Limited remains a full sponsor under the new CISE rules.

What will happen to new applications?

Any new applications for listings will need to be submitted to the CISE. If an application has been submitted but the securities have not yet been listed then a fresh application, based on the new rules, will be deemed to have been made to CISE.

Have the listing rules changed?

  1. 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 (eg. SPV) and certain other types of issuers, the requirements to produce accounts will generally be waived, in whole or in part, by the CISE.
  2. 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. In addition, each director must also supply a 10 year employment history and give certain other confirmations, as required by the CISE.
  3. 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.

Is there anything an issuer with securities already listed on the CISX needs to do?

No, as far as we are aware, 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 which applied prior to the restructuring.

Our understanding of the scheme and the associated restructuring is that things should be very much ‘business as usual’ for the CISE. We are anticipating that the processes and practices to be followed to make applications for listing are the same as those which applied prior to the restructuring.

Should you have any queries please email your usual contact at Ogier to discuss matters further.