3 August 2011

Listing On The Channel Islands Stock Exchange (CISX) – 10 Questions Answered.



Guernsey Finance is a joint industry and government initiative which seeks to promote and connect the island’s financial services sector in its chosen markets internationally. Based in Guernsey, the agency conducts marketing, communications and business development for members firms and also employs representatives in London, Hong Kong and Shanghai.
Tamara Menteshvili, Chief Executive of the Channel Islands Stock Exchange (CISX), answers 10 questions about listing on the Exchange.
Guernsey Wealth Management
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Originally published in Corp INTL, July 2011.

Tamara Menteshvili, Chief Executive of the Channel Islands Stock Exchange (CISX), answers 10 questions about listing on the Exchange.

1. Please give a brief background to the CISX.

Since its formation in 1998, the Channel Islands Stock Exchange (CISX) has become firmly established in the international marketplace and attracts business from many of the major regions of the world including the European Union. There are 25 countries represented on the Official List and more than 200 international issuers have chosen the CISX as the launch pad for the primary listing and the trading of their securities.

The CISX is an integral part of the finance community of the Channel Islands. The Exchange completes the range of services offered by financial services professionals in the Islands and helps to create new business opportunities.

2. What are the benefits of listing on the CISX?

The CISX offers a professional and personalized service with flexibility and responsibility. Its key features, which help to set it apart from competitor exchanges include consistency of response, swift turnaround of documentation, competitive costs and the approachability of the Market Authority who meet daily to approve listing applications. In its policy toward listing services, the Authority has demonstrated its willingness to list innovative structures, including limited partnership interests, master feeder funds, structured products and acquisition vehicles. However, flexibility does not come at the expense of high standards.

The CISX offers a full listing and trading facility for commercial businesses and closed-ended investment companies, with market makers and an order book facility. Transactions have the advantage of full CREST settlement. These trading facilities also extend to open-ended investment companies – a unique feature of the CISX.

The Exchange has become widely accepted for the listing of a range of alternative fund structures, including property and hedge as well as private equity funds. The CISX had been a pioneer in the private equity sector, being one of the first stock exchanges in Europe to allow the listing of interests in limited partnerships.

3. From your perspective, what advantages do Guernsey and Jersey offer for investment funds?

Both Guernsey and Jersey has been regarded for many years as centres of excellence for the investment funds sector. Finance professionals are attracted by both Islands' stable governments, tax neutral platforms, the breadth and depth of quality financial service providers based in the jurisdictions, their strategic time zone near to the UK and in the same time zone as London, together with their solid reputation for high standards of corporate governance and appropriate legislation. Few jurisdictions can match this range of advantages.

4. How would you describe the current fund environment in these jurisdictions?

Both Guernsey and Jersey's funds sectors have weathered the economic downturn remarkably well with both Islands investing in their funds industry to remain competitive. Both have had strong starts to 2011 with growth in terms of the value of the funds industry with Guernsey reporting a £6.2 billion increase on 2010. Jersey also reported growth with the Net Asset Value of funds under administration increasing by £5.8bn (3.2%) from £178.9bn to £184.7bn during the last quarter of 2010.

The CISX has also reported significant growth and by May this year the Market Authority was pleased to announce the admission of the Exchange's 4,000th security to the CISX Official List.

5. Are you seeing high levels of business activity from Guernsey and Jersey on the CISX?

The CISX has by far the most Channel Islands listings of any global exchange with more than 1,100 listings domiciled in either Guernsey or Jersey. Firms based in both jurisdictions have been active on the Exchange this year. However the CISX maintains a truly international following, with over 22 countries and well over 200 international issuers maintaining a listing. The Exchange has a broad range of securities represented on its Official List and many niche markets including structured funds, property funds and specialist debt securities.

6. Are there any particular sectors that are seeing high levels of interest in these jurisdictions?

The CISX continues to build its niche markets, particularly in structured funds which represent 45% of all funds listings, and property funds, 11%. There has been a shift too toward more listings in the specialised alternative investment sector with a focus on natural resources and commodities such as gold, energy and biofuels, as well as venture capital and private equity funds. At the same time, there is continued interest the listing of specialist debt, particularly acquisition vehicles for private equity firms.

7. What impact will the AIFM Directive have on Guernsey, Jersey and the CISX?

Guernsey and Jersey have been proactive in monitoring and responding to developments to the Alternative Investment Fund Managers Directive since its initial inception. The outcome in November 2010 removed any uncertainty about the future of the Islands' funds industries and both Crown Dependencies have committed to meet the agreed criteria for ongoing market access into Europe.

8. Are there any other recent or upcoming developments (legislative or otherwise) with significance for the industry?

There have been demands for greater regulation and increased transparency within financial services but such demands bring business opportunities to the Channel Islands as a whole. For example, during the past two or three years, we have seen greater focus by investors on the transparency benefits of a listing and this has proved an advantage to the Exchange.

9. To what extent did the global financial crisis affect funds activity in Guernsey and Jersey, and is it now recovering?

It is clear from the statistics that funds business activity did slow down during the economic crisis, which was to be expected. However, both Islands are participating in the increased level of business activity as the markets recover as is evidenced by the statistics and level of enquiries.

10. Do you have any predictions for the rest of 2011 and 2012?

There is a general uptrend which is positive for the CISX. There were more new issuers seeking a listing on the CISX during the first quarter 2011 than for the same period in 2010. We are experiencing a number of enquiries, particularly from US private equity groups, carrying out due diligence on the CISX in order to consider investment in CISX listed securities, so we anticipate some growth in this area. The CISX is noted for its innovative thinking – with such initiatives as the traded OEIC and the listing and trading of partly paid shares, as well as the listing of limited partnership interests which it introduced back in 2003. The Market Authority will continue to innovate, particularly within its core sectors of investment funds and the specialist debt market.

For more information about Guernsey's finance industry please visit

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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