Continuing Obligations
This Client Briefing has been prepared for the assistance of directors of companies listing "debt securities" as defined in Chapter 1 of the listing rules (the Listing Rules) of the Channel Islands Stock Exchange (the Exchange) under Chapter VIII of the Listing Rules. The Briefing sets out certain of the continuing obligations which an issuer is required to observe once any of its securities have been admitted to listing. This Client Briefing should be read in conjunction with the 'Channel Island Stock Exchange - Debt Listing' Briefing.
It is a prerequisite of listing that an issuer executes a listing undertaking, undertaking to comply with the Listing Rules and, in particular, with all relevant continuing obligations. Observance of the continuing obligations is essential to the maintenance of an orderly market in securities and to ensure that all users of the market have simultaneous access to the same information. Failure of an issuer to comply with any applicable continuing obligation may result in the Exchange taking the enforcement actions described in Chapter III of the Listing Rules.
The Listing Rules are available on the website of the Exchange - www.cisx.com.
General Obligation for disclosure for Issuers
Generally and apart from compliance with all the specific requirements of the Listing Rules, the issuer shall keep the public, the Exchange, the holders of the securities of the issuer and other holders of its listed securities informed as soon as reasonably practicable of any information relating to the issuer (including information on any major new developments in the issuer's sphere of activity which is not public knowledge) which:
- is necessary to enable them and the public to appraise the position of the issuer;
- is necessary to avoid the establishment of a false market in its securities; and
- might reasonably be expected materially to affect market activity in and the price of its securities.
Duty to notify the Exchange
Information that is required to be disseminated pursuant to the Listing Rules must not be given to a third party before it is notified to the Exchange except as permitted by the Listing Rules. An issuer may give information in strict confidence to its advisers, an agent employed to release the information, and to persons with whom it is negotiating with a view to effecting a transaction or raising finance, including prospective underwriters of an issue of securities, providers of finance or loans or the placees of the balance of a rights issue not taken up by shareholders. In such cases, the issuer must advise the recipients of such information that it is confidential and that they should not deal in the issuer's securities before the information has been made available to the public. An issuer shall notify information to the Exchange by the method laid down by the Exchange from time to time.
An issuer whose securities are listed on the Exchange and on any other Exchange must ensure that equivalent information is made available at the same time to the Exchange and such other Exchanges.
Financial Information
As soon as practicable following the publication of the annual report, relevant annual accounts or interim financial statements, the issuer shall send a pdf copy of such annual report, relevant annual accounts or interim financial statements to Ogier Corporate Finance Limited (OCFL) who will file them with the Exchange using the Market Data Management Service (MDMS).
Notification
The issuer shall immediately disclose to the Exchange by instructing OCFL to make an MDMS filing:
- any change in the rights, powers or privileges of any class of listed debt securities, including any change in their rate of interest, and any change in any of the rights, powers or privileges of any class of securities into which the listed debt securities are convertible or for which they are exchangeable;
- any decision to call, purchase, redeem or cancel any of the listed debt securities by the issuer. The information must also state the amount of the debt securities to be called, purchased, redeemed or cancelled and the amount of debt securities to be outstanding after the transaction or series of transactions is completed. Such transactions in listed debt securities may be aggregated so that no report need be made until five per cent of the outstanding amount has been subject to such transactions (or a decision made to enter into such transactions for five per cent or more of the outstanding amount of listed debt securities), but once that threshold has been crossed, each additional one per cent of the amount of outstanding debt securities must be reported; and
- any proposed changes in the constitution or capital structure of the issuer.
If the listed debt securities may be converted into or exchanged for securities of another company, or are guaranteed by another company, the issuer must ensure that adequate information is at all times available to the Exchange and the holders of the listed debt securities:
- concerning the business and affairs of the other company; and
- concerning the rights, powers and privileges of the securities into which the listed securities are convertible or for which they are exchangeable.
As a minimum the information provided to satisfy paragraph 10(a) of the continuing obligation Listing Rules must include the annual report and accounts of the company, any interim financial accounts, and all other information necessary for a realistic valuation of the listed debt securities to be made.
Review of documents by the Exchange
In addition to the specific requirements set out in the Listing Rules, the issuer shall submit to the Exchange, for review, copies of drafts before they are issued of any announcements or advertisements the subject matter of which involves a change in or relates to or affects arrangements regarding trading in the listed debt securities on the Exchange, including suspensions or cancellations of listings.
The issuer shall send to the Exchange, as soon as practicable after they are issued, one copy of the following:
General principles for Listing on the Exchange
The rules for the listing of equity securities on the Exchange (the 'Listing Rules') are designed to ensure that investors have and maintain confidence in the securities market. In particular:
- all resolutions of the issuer in respect of the listed issue passed other than in the ordinary course of business;
- any document relating to a take-over of, merger by or offer to purchase the issuer;
- all notices of meetings in relation to the listed issue;
- forms of proxy in relation to the listed issue;
- reports;
- announcements; and
- any other similar documents. The issuer shall submit two copies to the exchange of any document sent by the issuer (or on its behalf) to holders on the issuer's listed issue as soon as practicable after such documents are issued.
Enforcement Actions
If the Exchange considers that an issuer has contravened the Listing Rules it may do one or more of the following:
- censure the issuer, which may include a formal written notice of censure being served upon the issuer and the requirement that the issuer provide a written explanation of its actions to the Exchange and an undertaking to rectify the breach immediately;
- publish the fact that the issuer has been censured for failing to comply with the Listing Rules;
- refer the matter to the relevant criminal prosecuting authorities if empowered to do so; and
- suspend or cancel the listing of all or any of the issuer's securities where the Exchange considers it necessary for the protection of investors or the maintenance of an orderly market.
Unless the Exchange considers that the maintenance of the smooth operation of the market or the protection of investors otherwise requires, the Exchange will give advance notice to the parties involved on any action which it proposes to take and will give them an opportunity to make representations to the Exchange.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
