Listing On The Cyprus Emerging Companies Market: An Underestimated Potential?

Kinanis LLC


Kinanis LLC is a Cyprus law firm offering services since 1983, combining exceptional expertise in law, tax and accounting. The firm has offices in Cyprus, Malta and a China desk and employs more than 80 lawyers, accountants and other professionals, providing clients full legal and accounting support on an everyday basis as well as customized solutions in today’s global financial and legal challenges.
The Emerging Companies Market ("ECM") is a recognised unregulated market of the Cyprus Stock Exchange ("CSE"), offering the opportunity to Cyprus and international companies...
Cyprus Corporate/Commercial Law
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The Emerging Companies Market ("ECM") is a recognised unregulated market of the Cyprus Stock Exchange ("CSE"), offering the opportunity to Cyprus and international companies to list their shares or bonds. Since its launch, it has evolved from a market primarily focusing on small domestic companies, to an international market eager to welcome companies from around the world. Certainly, this transition, along with the main benefits of a listing, indicate the promising potential of the ECM to facilitate business growth.

Yet again, it seems that the potentials of listing on the ECM have been underestimated or not explored enough possibly given the size of the market when compared to other European non-regulated markets. Having the non-constant business and political environment in mind that has been evolving with greater speed than ever in the last few years, the need for regulation and transparency may be the only way forward.

Access to the European Market

The ECM is addressed to companies, either incorporated in Cyprus or abroad, which seek to float their securities to a recognised secondary market of a European Union Member State, granting access to the rules and safeguards of the European Union. Further, Cyprus is considered as a respectable EU jurisdiction, with a modernised and adaptive legal and regulatory framework and with tax incentives for both the listed company and its investors. Therefore, a listing on the ECM provides a significant strategic advantage for the listed companies which aim to enhance their EU market presence and attract more investors.

Simplified legal framework and cost effectiveness

Unlike regulated markets, the ECM, as a Multilateral Trading Facility (MTF), operates in accordance with simplified rules and regulations specifically designed to meet the needs of small and medium size emerging companies. The simplified legal framework reduces the complexity and the costs for the set up and maintenance of the listed company, when compared to the regulated market of the CSE or other European jurisdictions. In effect, listed companies on ECM can operate effectively under a lighter, yet flexible and trustworthy legal framework.


Despite the simplified legal framework, there are significant transparency rules in place, which strengthen the status of the ECM and may attract issuers. It is important to note that the ECM is recognised as a market which is subject to equivalent international standards which ensure adequate transparency of ownership information and therefore, when it comes to beneficial ownership registries same rules as listed companies on the main market apply.

General Listing Requirements

The general listing requirements apply for both the regulated market and the ECM. Namely:

  • The issuer should be a properly established and operating public company in case of listing shares .
  • The issuer must be authorized to issue the specific securities which seeks to float in pursuance to the law of the country of its incorporation, the Memorandum and Articles of Association or any other document governing the terms of its incorporation and relations among its members.
  • The application for listing refers to all securities of the same class that have already been issued or are expected to be issued as well as any rights or other financial derivatives that are converted or entitle to be converted into securities of the same class of securities to be listed.
  • The securities proposed for floatation must be fully paid and freely transferable.
  • Equal treatment must be secured to the beneficiaries of securities of the same category, in respect of all rights or obligations related thereto.
  • The issuer must be prepared and able to deliver its Register to the Central Depository and Registry and to respond to any obligation upon the undertaking or the future keeping of the Register or Registers of its shareholders.

Special Listing Requirements for ECM

  • The issuer must be a public company with a satisfactory number of investors (at least 10). No minimum share capital must be dispersed among the public.
  • The issuer must have published audited accounts, had normal operations and related activities for at least the two years preceding the application. Newly established companies will be able to be listed if the Cyprus Stock Exchange (CSE) council, judges that potential shareholders are given satisfactory information that would allow them to access properly the value of the titles, from the Nominated Advisor (NOMAD) of the issuer.
  • Throughout the floatation procedure, the issuer must have a Nominated Advisor (NOMAD).
  • There is no criterion for the minimum market capitalization an issuer must fulfil or maintain.

The above-mentioned benefits and straight forward listing requirements for listing on the ECM evidently show that the potentials of the non-regulated of Cyprus Stock Exchange are undervalued especially in this new era of heavy regulation and transparency. It is the case that investors do turn to more sophisticated and regulated paths for their investment and in this respect, it is time for businesses to explore new opportunities.

Our firm, being an approved Nominated Advisor, is equipped to assist you to facilitate the listing of your company on the ECM. Further, we can assist with preparation and submission of the necessary documents in relation to the listing, incorporation of a Cyprus public company or conversion of a private company to public, full legal administrative, management and accounting support for the lifetime of the company, general regulatory compliance.

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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