Jersey: Revised Chapter 8 Listing Rules For The Channel Islands Securities Exchange Authority

Introduction

In December 2013, following the restructuring of the Channel Islands Stock Exchange (the "CISX"), the Channel Island Securities Exchange Authority Limited (the "Exchange") commenced operations. The Exchange provides a listing facility and market for companies to raise capital from investors worldwide based on a bespoke trading platform. The Exchange's strategy for the future, in addition to maintaining and enhancing their core business sectors, is to look to diversifying their business base. As part of this strategy the Exchange has carried out a comprehensive review of the Chapter 8 Listing Rules (the "Listing Rules") and a revised chapter entitled 'Specialist Securities' will be published and come into effect on 19 October 2015.

In addition to the revised Listing Rules, the disclosure requirements which should be incorporated into the listing documents for all listings under Chapter 8, as set out in Appendix IX, Part D, have been updated. The Exchange has also produced a Chapter 8 Policy Guidance Note (the "Guidance Note") to be read in conjunction with the revised Listing Rules.

The Exchange has built flexibility into the Listing Rules as well as formalising procedures which were already carried out in practice. The Exchange is open to exploring new opportunities, including expanding the types of debt securities which may be suitable for listing as well as the type of debt issuers, to diversify their business base and the amended Listing Rules reflect this.

This briefing summarises the key changes to the Listing Rules and the revised disclosure requirements.

Sophisticated investors

Emphasis is given in the revised Listing Rules to the fact that securities listed under Chapter 8 should only be issued to sophisticated investors. A statement confirming that "These securities are only intended to be offered in the primary market to, and held by, investors who are particularly knowledgeable in investment matters" must be included in the listing document.

Trading companies and convertible debt

The Exchange has expanded the types of debt issuers which may be considered suitable for listing on the Exchange as well as the types of debt securities. This is good news for trading companies going forward. A trading company, provided the debt is being issued to another group company or to sophisticated investors, may seek to list debt under Chapter 8. Previously a trading company had to list its debt under Chapter 6 of the listing rules, a much more onerous regime. This however does not apply to convertible debt.

In relation to other companies the Exchange may consider certain convertible debt securities suitable for listing where the equity into which the debt converts is listed on a recognised exchange. In such cases the issuer may be a company whose equity is listed on an acceptable exchange, a wholly owned subsidiary of the parent company with listed equity, or as agreed with the Exchange. The Exchange has experienced an increased volume of convertible bonds listings in the first 6 months of 2015 and sees this as a significant pipeline of new business.

In addition to the above changes, the Exchange has given itself the scope and flexibility to consider listing securities issued by "other companies" and this would include debt securities issued by investment companies. A general provision has been included at Listing Rule 8.4.11 to consider other categories of securities. We would recommend early contact be made with the Exchange to discuss such possible listings.

Accounts

A number of amendments have been made in the Listing Rules with reference to an issuer's accounts. The most significant amendment is that there is now a requirement for issuers of debt securities to submit their annual accounts (audited or otherwise) to the Exchange within 6 months of the period end to which they relate unless exempted under the Listing Rules or otherwise agreed with the Exchange.

For an issuer required to publish its audited accounts under the laws of its jurisdiction of incorporation then the audited accounts must be published on the Exchange's website or a link provided to publicly available information placed on the internet. Where an issuer is not so required to publish audited accounts, then a copy of the annual report and accounts must be provided to the Exchange.

More flexibility has been incorporated into the Listing Rules in relation to the accounting standards in accordance with which the annual accounts may be prepared and audited and in particular the Exchange has the flexibility to agree to accounting standards other than UK Accounting Standards, US Accounting Standards or International Accounting Standards and equivalent auditing standards.

The Listing Rules (LR 8.2.2.1(b)) now provide that the issuer, if it has subsidiaries, must produce consolidated accounts for the issuer and its subsidiaries. However, the Guidance Note provides that the Exchange may derogate from such requirement where an issuer is not required to produce consolidated accounts by the laws of the country or territory in which it is established, provided that consolidated accounts are prepared by an appropriate member of the issuer's group and these consolidated accounts are available for review by the investors and by bona fide potential investors.

Application procedure

A number of amendments have been made to the application procedure to reflect current practice. Final application documents must be received by the Exchange in electronic form by email no later than midday on the intended listing date. Also worthy of noting is that directors' declarations may be waived in specific circumstances.

Continuing obligations

The Listing Rules have been updated in a number of areas to clarify the continuing obligations and also reflect current practices. The following should be noted.

The Exchange must be notified, within 14 days, of the following:

  • any change in the rights, powers or privileges of any class of listed securities and any changes in the terms of any class of listed securities into which listed securities are convertible or for which they are exchangeable;
  • any decision to call, purchase, redeem or cancel any of the listed securities by the issuer and, if applicable, an application to de-list the securities will need to be made to the Exchange;
  • any change to the constitutional documents of the issuer;
  • any appointment or resignation or removal of a director (the reference to director includes a corporate director). Any appointment must specify whether the position is executive or non-executive and whether the director has a specific function or responsibility; and
  • any change to the disclosed function or responsibility of a director, including the effective date of the change.

A completed Appendix IV or V declaration must be filed with the Exchange within the 14-day period. An announcement on the Exchange's website must be made with respect to any of the above.

Where an alternate director is appointed and regularly performs the functions of a Director of the issuer then they will be required to complete a director's declaration. This, however, may be waived if the alternate director is appointed on an ad hoc basis.

The issuer is now required to notify the Exchange immediately of any change to its auditors or registered address.

It should be noted that the Guidance Notes include a requirement that if documents submitted to the Exchange require same-day action then they must be lodged with the Exchange no later than midday on the relevant notifiable date.

Listing documents: disclosure requirements

Appendix IX, Part D, which sets out the disclosure requirements for the listing documents for Specialist Securities has been updated and now includes a number of new additional disclosure requirements:

  • a summary of the nature of the business of the issuer;
  • where an issuer has produced audited or interim accounts if, following the period to which such accounts relate, there has been a material adverse change to the issuer, its group structure, its business or accounting procedures or the financial trading position of the issuer then details of the changes, together with any available accountant's report must be included or appended to the listing document or an appropriate negative statement included;
  • details of all material interests and potential conflicts of interests of all interested parties to the application;
  • any relevant risk warnings;
  • if more than 9 months have elapsed since the end of its financial year and the issuer has entered into transactions, other than in connection with the issue of debt, then interim financial statements covering the 6 months from the financial year end must be included or appended to the listing document; and
  • additional information relating to guarantees, security or commitments including any limit on the life of the guarantees, security or commitments and whether they are intended to cover principal or interest or both and if any such credit support is provided by group entities.

Conclusion

The Listing Rules, including the amended Appendix IX, Part D will be available on the Exchange's website from 19 October 2015 together with updated checklists, application forms and the Guidance Notes. The amended Listing Rules have clarified many of the day to day procedures and practices which is useful for sponsors and issuers alike and helpfully have built in greater flexibility for the Exchange to consider additional companies or types of securities for listing on 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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Mark Helyar
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions