In response to the recent announcement concerning the Channel
Islands Stock Exchange (CISX) and its temporary
hold on new listing applications, Appleby are available to advise
clients looking to list specialist debt securities on either the
Bermuda Stock Exchange (BSX) or the Cayman Islands
Stock Exchange (CSX).
Both the BSX and the CSX are "recognised stock exchanges" under Section 841 of the Income and Corporation Taxes Act 1988 which enables companies whose securities are listed on the BSX or CSX to take advantage of the 'quoted eurobond exemption'. As a result, interest paid on those listed securities can be made gross without deduction for tax.
The Listing Rules of the three exchanges are very similar in form and content, and each dedicates a portion of their respective listing regulations to the listing of specialist debt securities. The listing procedures, costs and continuing obligation requirements of the CSX and BSX are comparable to that of the CISX.
The CSX adopts a narrower definition of "specialist debt securities" linking it to securities that are "usually purchased and traded by a limited number of investors who are particularly knowledgeable in investment matters." However, in our experience, the vast majority of holders of these types of securities that are currently listed on the CISX would fall within this definition (private equity firms and financial institutions etc.).
The BSX has broad scope for what it considers "specialist debt listing", and includes, for example, asset backed securities, debt insurance programmes, insurance securitisation bonds, and any other bonds which, by their nature, are purchased and traded by investors who are generally very knowledgeable in investment matters.
All three exchanges require equal and fair treatment to all holders of a single class of listed securities; that such securities are in principle freely transferable (subject to certain approved restrictions); and that an issuer company must have two years of audited accounts published prior to listing, save where the issuer falls within the particular exchange's definition of special purpose vehicle.
The BSX and CSX both require slightly more disclosure of financial information from an issuer company and its wider group than the CISX; but these additional requirements are not, in our view, onerous.
BSX, CSX and CISX Listing fees are comparable and none are bound by any European Union Listing Directives. Similarly, none of the exchanges impose a requirement to appoint a local paying agent or clear securities through a clearing system.
Please contact us for more details on the similarities and differences between the three exchanges and for general advice on listing on the BSX or the CSX.
Appleby has a leading listing practice and is a registered Listing Agent for both the BSX and the CSX.
Latest Position on the CISX - Exchange confirms PIK Listings and Redemptions for existing listed Issuers will continue. Click here to view the CISX's Operational Statement.
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.