The Channel Islands Securities Exchange Authority Limited (the
Exchange) has recently announced changes to
chapter 7 of its listing rules (Listing Rules)
applicable to issuers listed under chapter 7 (investment vehicles)
and to its model code for securities transactions (Model
Code) each of which will take effect from 1 September
Proposed changes to chapter 7 of the Listing Rules
Principles and guidance based approach
The most important change is one of approach: chapter 7 will
follow what the Exchange describes as a "principles and
guidance based approach" comprising a revised set of
rules which must be adhered to and accompanying guidance
notes which are intended to explain the implications of such rules
and indicate possible means of compliance and/or recommend a
particular course of action or arrangement. The expectation
of the Exchange is that this approach will make chapter 7 more up
to date, accessible and enable the Exchange to be more dynamic and
facilitate product innovation.
Summary of key changes to chapter 7
Some of the key changes made to chapter 7 are as follows:
Expansion of chapter 7 to encompass
all types of investment vehicles (not just investment funds).
Simplification of the conditions to
listing, including guidance as to how to satisfy the Exchange's
requirements relating to the experience and independence of
directors and investment managers.
Overhaul of the continuing
obligations applicable to chapter 7 issuers including revising the
over-arching principles of continuing obligations, clarifying the
timing for making notifications to the Exchange and where
there is a change of service provider, extending the range of
service providers in respect of whom notifications to the Exchange
Streamline provisions relating to
transactions entered into by chapter 7 issuers. These include
welcome changes that shareholder approval for substantial and/or
related party transactions is only now required where they fall
outside the scope of the investment vehicle's activities and
investment policy and clarifying that start of life/end of life
transactions are not caught so long as they are within the
investment policy or, in the case of end of life, a winding-up or
similar process approved by holders.
Chapter 7 issuers are advised to make themselves familiar with
the changes to the Listing Rules, particularly those relating to
The Model Code has been revised following the European
Union's implementation of the Market Abuse Regulation
(MAR) with the intention of aligning the Model
Code with certain provisions of MAR relating to persons in
managerial positions and their dealings. The revised Model
Code will take effect from 1 September. The revised version
is available here: Appendix VI - Model Code
Some of the key changes include:
Reduction of "closed
periods" from 60 to 30 calendar days.
Clarify those individuals whose
dealings are covered by the Model Code. In brief, the revised Model
Code closely follows MAR's concepts of "persons
discharging managerial responsibilities"
(PDMR) and their "persons closely
Permit dealings by a PDMR pursuant to
a "trading plan" under which an independent third party
has discretionary authority to undertake trading decisions on
behalf of the PDMR. Providing such a plan has been cleared in
advance in the usual manner before a prohibited period and certain
other requirements are complied with a PDMR may deal pursuant to
the trading plan during a prohibited period.
Issuers subject to the Model Code are advised to review their
current dealing policies before 1 September to ensure compliance
with the revised Model Code.
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.
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