Bermuda: Guide To Listing On Trop-X

Last Updated: 28 January 2013
Article by Malcolm Moller


The Securities Act 2007 laid the legal foundation for the Seychelles Securities Exchange. In April 2011, Trop-X (Seychelles) Limited ("Trop-X") submitted a proposal to the Seychelles International Business Authority and the first securities exchange licence was issued to Trop-X on 15 June 2012.

With the launch in November 2012, the securities exchange is expected to provide the platform for public companies and entrepreneurs to access affordable and sustainable global capital pools and Trop-X has indicated it aims to be attractive to both regional and international investors and issuers as well as providing high-quality, low-cost access to finance.


The main advantages of listing on Trop-X are:

  • Simplicity - the listing requirements provide the necessary compliance and assurance that investors will be seeking but without over-regulation.
  • Cost - listing on Trop-X is expected to cost approximately 30% less than listing on boards such as AIM, the JSE, Alt-X, SEM or TSX.
  • Multi-currency - securities on Trop-X can be listed in any currency which will reduce the exchange rate risk associated with other African exchanges where securities can only be traded in the local currency.
  • Taxation - there is a favourable tax regime.
  • High Technology - Trop-X is set to offer a new state-of- the-art platform for high speed trading of securities listed comparable to the best international exchanges.
  • Liquidity - no share transfer tax is payable in Seychelles which will enhance tradability and liquidity in listed company shares.
  • Manageability - Trop-X has adopted the successful model used by AIM in London where each listed company is answerable to a Sponsor Advisor who in turn is answerable to the exchange.


Trop-X is embarking on a 12 month tiered launch of a multi-asset, multi-currency financial exchange and institutional and retail investors from around the world will have the opportunity to trade a variety of asset classes. Initially, equity securities can only be listed and traded but Trop-X is expecting to expand its products and services - in the first quarter of 2013 a bonds board and by the end of 2013 a derivatives board are due to be launched.

For equities, three equity boards will be launched:

  • Venture Capital Board ("VC Board") for developing companies raising up to US$10 million;
  • Small Medium Enterprise Board ("SME Board") for companies raising up to US$35 million; and
  • Main Company Board ("Main Board") for mature companies raising over US$35 million.


The listing requirements for the VC Board, SME Board and Main Board are available on the Trop-X website at The general listing requirements are contained in Section 2 (Listing Requirements for Securities) of the listing requirements and the specific criteria for the equity boards are contained in Section 9 for Venture Capital Companies, Section 10 for Small and Medium Enterprises and Section 11 for Main Companies. Trop-X has produced listing schedules which supplement the listing requirements and these are also available from the website. The listing schedules include the information that must be provided in prelisting statements; additional requirements for mining companies or investment entities, fast-track and cross listing; the responsibility statements of directors and service providers; and sets out the fees to be paid by issuers (see Appendix). The listing requirements and listing schedules are together referred to in this guide as the "Listing Rules". References to Sections and Schedules in this guide are to Sections and Schedules in the Listing Rules.

The VC Board is for issuers considered to be start-up companies, with little or no operating history but with the potential for high growth and high returns for investors. To list on the VC Board inter alia:

  • The company must be seeking to raise up to US$10 million in capital.
  • No profit history is necessary but the listing company must be able to show that its future earnings and returns on capital are credible and produce five year cash flow forecasts to support this.
  • A minimum of 10% of the issued shares must be held in public hands by a minimum of five persons.
  • The company must have a minimum of two executive directors in full-time employment of the company.
  • Sponsor Advisors and their affected persons may not own more than 10% of the issued equity capital of the company.

The SME Board is for issuers that have been in operation for at least one year. In order to list on the SME board inter alia:

  • The company must be seeking to raise up to US$35 million in capital.
  • The company must be able to:
    • provide a minimum of one years externally audited financial statements; and
    • show that its future earnings and returns on capital are credible and produce five year cash flow forecasts to substantiate this.
  • A minimum of 15% of the issued shares must be held in public hands and by a minimum of 20 persons.
  • The company must appoint a minimum of two executive directors in full-time employment of the company.
  • Sponsor Advisors and their affected persons may not own more than 5% of the issued equity capital of the company.

The Main Board is for companies that have been operational for at least three years. In order to list on the Main Board inter alia:

  • The company must be seeking to raise over US$35 million in capital.
  • The company must provide externally audited annual financial statements for at least the last three years and must be profitable.
  • A minimum of 25% of the issued shares must be held in public hands and by a minimum of 60 persons.
  • The company must appoint a minimum of three executive directors in full time employment of the company.
  • Sponsor Advisors and their affected persons may not own more than 5% of the issued equity capital of the company.

Investment entities (which include closed-ended investment companies, approved mutual funds, special purpose acquisition companies) are required to comply with the conditions of listing for a Main Company (as defined in the Listing Rules) and additional specific requirements set out in Section 6 (Investment Entities) and Schedule 7 of the Listing Rules. These include inter alia a description of the investment policy; details of current and intended investments; and details of the fund administrator, custodian, investment manager and investment advisor.

Trop-X may admit securities of a foreign issuer as a fast-track listing where the securities have been registered on a designated market for a period of not less than 18 months and provided the issuer is in good standing on the market where it has its primary listing. The application must be submitted by a member or sponsor advisor of Trop-X. The details are set out in Section 12 (Fast-Track, SADC and Cross Listing) of the Listing Rules. Schedule 8 sets out the prescribed information to be submitted and this includes the name of the applicant and its sponsor advisor, the designated market where it has its primary listing and the board on which it trades, how long it has been listed, the number of shares in issue and percentage in public hands and the reason the applicant feels listing on Trop-X would be suitable.

An issuer that maintains a primary listing on a recognised overseas securities exchange may apply for a cross listing on Trop-X. The application requirements are set out in Schedule 9 and in addition to the general requirements that all issuers must satisfy (see paragraph below), the company must submit its memorandum and articles of association, the documents issued by the company and approved by the designated market of the primary listing in the preceding 12 months and proof of shareholder, board or regulatory approval of the secondary listing.

All issuers must satisfy certain general requirements including inter alia complying with the obligations under the relevant company legislation in Seychelles or its country of incorporation or regulation. Additionally, the listed securities must be freely transferable and eligible for electronic settlement and be dematerialised; the issuer must produce and publish financial statements on a specified periodic basis and the company must maintain a website and publish certain prescribed information on its website; the company must abide by the closed period applicable to the issuer; and must comply with requirements relating to the appointment, retention and resignation of directors and service providers.


The application procedures and requirements are set out in Section 3 of the Listing Rules. The listing procedure essentially comprises four steps - appointment of service providers and satisfying the listing condition; submitting the application for listing; receiving listing approval; and listing.

The first stage in any application for admission to listing is the appointment of a sponsor advisor, an external auditor and a company secretary, each of whom must be registered with Trop-X. At the date of this guide, the service providers registered are Grant Thornton and Constant Capital (Seychelles) Ltd. Contact details are available on the Trop-X website at

The sponsor advisor will guide the applicant as to the required content and preparation of the admission documents. Prior to submission of the admission documents, a proposed listing timetable highlighting important dates must be submitted by the sponsor advisor to the Listing Division of Trop-X for approval.

The Listing Rules set out the required documentation to be submitted and the documentation will depend on the board on which the company is proposing to list and the method of listing, as well as whether the issuer is a mining company or investment entity or if the Trop-X listing is a primary or secondary listing. There is no prescribed format for the pre-listing statement as long as the required information is presented clearly. Responsibility statements from directors and service providers must be included.

Except as otherwise expressly restricted in the Listing Rules, Trop-X will consider any listing methods provided the issuer has the necessary shareholder approval, the applicant meets the requirements in the Listing Rules and the sponsor advisor is in agreement with the method. Listing methods include an introduction, a placement, or an offer for sale; or where the applicant has securities listed already, in addition to the above, a rights issue, a capitalisation issue, conversion of a class of security into another, or an exercise of warrants or options.

Once all admission documents have been completed, the sponsor advisor will submit the admission documents to the Listing Division together with a declaration. The documentation must be submitted at least 30 business days before the proposed listing date.

When the Listing Division is satisfied that the application is complete, it will forward the application to the Listing Committee for final review and a decision on the application.

Admission to the Trop-X list of securities will become effective when Trop-X issues a listings notice informing the market of the admission of the issuer's securities to the Trop-X list of securities. An issuer has four months from the approval of the pre-listing statement to conclude its placement. An extension is possible but may be granted at the sole discretion of Trop-X following receipt of an application by the issuer.

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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