GEM is operated by the Irish Stock Exchange as a market operator. It does not fall within the scope of the EU regulated markets as defined in MiFID and therefore the requirements of the Prospectus Directive and the Transparency Directive do not apply.
GEM is an exchange-regulated market which meets the criteria of a Multilateral Trading Facility ("MTF") within the meaning of the Markets in Financial Instruments Directive ("MiFID"). A listing application on GEM is subject to the rules of the Irish Stock Exchange only and reviewed and approved by the ISE.
GEM offers a greater degree of flexibility than can be afforded to issuers choosing the regulated market and is seen as a viable alternative to issuers who may not be in a position to meet the requirements of the Prospectus Directive and the Main Securities Market.
TIMING AND COSTS
Listing on GEM is achieved through the publication of a listing particulars rather than a prospectus. The ISE's review process, timeframes and standards are subject to the same as those applied to the Main Securities Market. Three working days are required to review an initial submission with comments being returned within two working days for each subsequent submission. Approval and listing occur on a same day basis. Equally, the cost of admission to trading on GEM is similar to that which is applied to the Main Securities Market.
WHY CHOOSE GEM FOR LISTING?
- Falls outside the remit of the Prospectus and Transparency Directives.
- Provides more flexibility for Issuers as GEM is not bound by EU framework.
- Affords the same competitive timeframes and efficiency for reviews and high standards as the regulated market.
- More flexible requirements as regards the filing of financial information.
- GEM offers a less stringent regime for the incorporation of documents by reference. It is possible to incorporate items by reference contemporaneously with approval, including SEC filings such as 10-k's.
- Where it is necessary to make a derogation request, the ISE will review such requests together with the Listing Particulars and revert with their views on the derogation letter within three business days versus five business days for listings on the Main Securities Market.
- No distinction is made between wholesale securities (over €100,000 or its equivalent) and retail securities (less than €100,000 or its equivalent) and therefore Issuers are not required to produce interim financial statements or to file financial information within the tight timeframes laid down by the Transparency Directive.
The ISE deadline for receipt of approval submissions is 2pm Irish time on the day in question.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.