On March 4th 2004 the Board of the UK Inland Revenue granted the Cayman Islands Stock Exchange (CSX) status as a "recognised stock exchange" under Section 841 of the Income and Corporation Taxes Act 1988.
The treatment of the CSX as a recognized stock exchange lead in 2004 to an immediate enhancement of its reputation and competitive advantage; placing the Exchange on the same footing as the Irish, London and Luxembourg stock exchanges.
What does this recognition signify?
It is a significant advancement for the recognition and status of Cayman as a listing jurisdiction for funds and debt securities and provides an alternative listing venue for funds that had previously sought listing on the Irish, London and Luxembourg exchanges.
- Companies listing debt securities on the CSX can take advantage of the "quoted eurobond exemption". This way interest on such securities is paid without deduction of UK withholding tax. The Cayman Islands is one of the leading jurisdictions for structured finance transactions and the recognition increases its attractiveness as the offshore financial centre most suitable for the issuance and listing of corporate debt and a variety of asset-backed and securitised interest-bearing notes.
- Securities of any company listed on the CSX may be regarded as "qualifying investments" for the purpose of investments in personal equity plans (PEPS) and individual savings accounts (ISAs). Most of the securities held directly in Personal Equity Plans (PEPs) and Individual Savings Accounts (ISAs) must be "qualifying investments". ISA and PEP managers may elect to invest in any debt securities, corporate bonds, notes, hedge funds and any other funds listed on the CSX.
- Personal pension schemes can hold securities listed on the CSX . UK residents can invest their tax and retirement plans in Cayman Islands Stock Exchange listed funds. Shares listed on a recognised stock exchange are a permitted investment for a self-invested personal pension (SIPP). That includes equities as well as warrants (for equities) and convertible securities. Hedge funds listed on the CSX qualify as a permitted SIPP investment.
Recognition of the CSX by the UK Inland Revenue confirms the CSX as a global player with the regulatory and legislative framework necessary for the conduct of international finance and securities transactions.
* Now known as UK HMRC
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