Recent years have continued to show an increase in the use of Jersey companies listing on the London Stock Exchange (LSE), with high profile Initial Public Offerings (IPOs) cementing Jersey's reputation as the jurisdiction of choice for overseas businesses looking to list in London. Aside from Jersey's place in the top tier of International Finance Centres, its favourable tax environment, flexible legal framework, stable political system and convenient time zone, it is the collective expertise of the specialist capital markets teams within the legal and corporate services providers that puts Jersey firmly in pole position in the IPO market. Such expertise is especially important when helping clients from emerging market countries to manage the expectations held in 'the City' that UK standards must be maintained, regardless of the company's jurisdiction.
Providing the infrastructure companies require
To ensure that companies withstand the rigours of a London listing, it is vital that experienced company secretaries and administrators are appointed to help implement and maintain robust corporate governance policies and procedures. These include: regular communication with investors; the establishment of audit and remuneration committees that are properly and regularly held; the creation of a board of directors comprising a sufficient balance of non-executives with experience relevant to the business and the establishment of strong accounting and financial reporting structures.
In some cases companies using Jersey as a route to a London IPO do not have the luxury of a large head office function. This can cause certain practical difficulties and these companies will usually look towards their Jersey administrator to provide support, ranging from the maintenance and operation of bank accounts to the provision of staff to assist with bookkeeping and accounting responsibilities.
Such companies may also look towards their Jersey administrator to help navigate the various listing and disclosure and transparency rules. This support can often include the preparation and release of stock exchange ('RNS') announcements, insider list management, AGM support and investor relations support.
It is also important that a registrar is appointed to ensure that the share register is properly maintained offshore. With a number of experienced registrars based in Jersey, companies are able to facilitate trades through CREST, free of stamp duty, without the need for a depositary receipts programme.
Jersey waits with interest for the outcome of a recent Consultation paper by the UK Government's Financial Services Authority (CP12/2), which proposes certain changes to the listing rules. The findings are due shortly. There is no doubt that overseas and emerging market companies seeking a London listing will be subject to increasing scrutiny and investors will expect a strong corporate governance structure to be in place. With its track record and expertise, Jersey is ideally placed to provide the infrastructure that these companies require.
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.