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CSX slashes listing transfer fees to win European business

| 31/10/2016 | 0 Comments

(CNS Business): The Cayman Islands Stock Exchange has made a play to capture listing business from Europe, where issuers have been hit by additional red tape relating to market issues, while slashing the costs of transferring debt listings to Cayman. New legislation in the European Union to tackle market abuse and insider information has significantly ratcheted up the administrative and compliance burden for issuers with instruments listed on stock exchanges in Europe.

The EU Market Abuse Regime Regulation (MAR) and EU Directive on Criminal Sanctions for Market Abuse (CSMAD) both came into force on July 3 2016.

Among other actions, the new EU regime requires issuers of securities to introduce policies to ensure compliance with additional disclosures, the preparation of ‘insider lists’ and reporting of transactions involving persons discharging managerial responsibilities within the issuer.

The CSX said this level of regulation involved is overarching and applies to instruments admitted to trade on exchanges and markets in the EU, including EU multilateral trading facilities such as the Global Exchange Market (EM) operated by the Irish Stock Exchange.

Because the new EU regime does not apply to listings on the CSX, officials said the regulatory burden in Cayman is less onerous than on other EU exchanges.

“We invite issuers who are concerned by the wide-ranging scope of the obligations which will be imposed upon them by the New EU Regime to consider to consider transferring their EU listing to a Cayman Islands Stock Exchange listing and listing on the CSX,” said Valia Theodoraki, CSX Chief Executive in a statement. “Further, issuers listed on the EU exchanges and the EU multilateral trading facilities can transfer their securities under a designated streamlined application process which is quick and easy.”

According to the exchange, existing documentation can be used to effect a listing transfer, with the addition of a wrapper to the Listing Document, which means that a transfer can be completed in just five working days.

To help facilitate the switch for issuers currently on EU exchanges, the CSX has halved the fees associated with the cost of a listing transfer, with a standalone issue reduced to US$ 1,250 from the current US$2,500, while a fees for a Programme come down from US$3,000 to US$1,500 and a Series under the Programme is just US$500, instead of US$1,000.

Regarding the new legislation in Europe, Simon Witty, partner in the corporate department at US law firm David Polk & Wardwell, said that this is the first time that issuers of securities on previously unregulated exchanges across the EU will be subject to onerous obligations.

“US issuers may wish to consider de-listing from EU trading where the new issuer obligations are considered to be too onerous and they wish to be removed from the scope of the EU Market Abuse Regime Regulation,” he said in a research note, adding that issuers should check to establish whether the noteholders have to be consulted about de-listing, as well as obtain local advice on the procedures for de-listing from the relevant exchange.

Unlike the exchanges in the main European countries like France, Germany, Holland and the UK, or the US, the CSX lists very few equities, with just four stocks currently traded, with most liquidity in Cayman National shares. The CSX is renowned as a listing venue for specialist debt securities such as structured finance issues, securitisations, sukuks and loan participating notes, as well as corporate debt issues, including private equity and capital markets transactions. Over 4,200 securities have been approved for admission to the CSX, with the total market capitalisation of over US$197 billion.

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Category: Finance, Financial Services

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