Tag: Emerging Companies Market

October 9, 2015 3:56 pm

The Cyprus Stock Exchange (CSE) announced that it has accepted more than 15 listings of bonds on its Emerging Companies Market that were previously listed on the GXG Markets.

In the context of its efforts to improve its service and broaden the range of products and services provided, the Cyprus Stock Exchange has created two new Markets in the Emerging Companies Markets, according to which it now allows listings in Sterling pounds (GBP) and with the Registry of the Issuers not to be kept with the Cyprus Central Depository, but in CREST.

The securities to be traded will not be entered in the CSE’s Central Depository /Registry and will not be cleared / settled by the Central Depository / Registry. The clearing and settlement of the transactions for these two new markets in GBP will be carried out by clearing agents. The relevant Regulatory Decisions have been published in the Official Gazette of the Republic: RAA 311/2015, RAA 312/2015, RAA 313/2015 and RAA 314/2015.

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October 8, 2015 3:59 pm

Private corporations from most jurisdictions are eligible to issue and then list their bonds on the Third Market of the Vienna Stock Exchange or the Emerging Companies Market of the Cyprus Stock Exchange (ECM/CSE) under simplified rules and conditions.

Under the EUs MiFID regulations aimed at encouraging competition within capital markets, the EU allowed for the creation of Multilateral Trading Facilities (MTF) which have been described as a form of “lite exchange” because they provide similar or competing trading services, such as rulebooks and market surveillance departments, but operate through simplified procedures and at very competitive fees than what it would cost to list financial instruments (shares, bonds, funds) on the traditional stock market segments.

The MTF Market of Vienna Stock Exchange is operated by the regulated Vienna Stock Exchange and the ECM is operated by the Cyprus Stock Exchange, which is the MTF Market of Cyprus.

In Vienna they also refer to the MTF Market as the Third Market but trading in bonds goes through the same clearing and settlement structure.

MAIN ADVANTAGES

The biggest advantages for listing in MTF Markets are:

  • The Issuer does not need to have prior history. Special Purpose Vehicles (SPVs) can be formed and the companies can act as the Issuer.
  • A bond listing on an EU stock exchange allows the Issuer regulatory approval to sell the bonds and raise money from investors across the EU28.
  • Issuer secures Austrian (AT) International Securities Identification Number (ISIN).
  • All kinds of denominations possible for listings on Vienna SE.
  • There is no minimum or maximum ownership rule.
  • The concept of using nominees is legally allowed.
  • There is no minimum volume rule. This means even if for the whole year there is no volume traded on the financial instruments, this is acceptable.
  • Listing is done by submission of Information Memorandum under simplified listing procedures.
  • Listing is secured on average in 2-4 weeks.
  • All applications submitted by e-mail.
  • Listing costs are significantly lower.
  • The level of reporting after listing is negligible.
  • Trading in the financial instruments is done via brokers.

TYPES OF BONDS

The Vienna Stock Exchange allows for most types of bond listings including:

  • Traditional bonds with fixed coupon
  • Floating rates
  • Zero coupon bonds
  • Performance linked bonds*, whose value is tied to the performance of the underlying asset.

*Performance Linked Bonds are increasingly becoming attractive since they spread the risk of performance on the investors.

Such Performance Linked Bonds may also be used for trading in capital markets in derivative products such as trading in shares, bonds and forex. When the trading performance is positive, the NAV will increase, whereas if there are trading losses, the NAV will decline.

AT-ISIN

The Vienna Stock Exchange prefers for Issuers to conduct their private placement of bonds and then list on the Exchange. An Issuer can apply for a larger amount of listing, but list the bonds in tranches of minimum EUR 200.000 lots over several years.

Once the listing procedures have been approved, Eurivex will secure an Austrian AT-ISIN for the bonds.

In future, an Issuer may continue to privately place additional bonds and then following a simple process, add-on to the existing issue (same ISIN) subject to Vienna Stock Exchange approval.

SIMPLIFIED PROCEDURES

One of the key advantages of listing on the MTF Market of Vienna Stock Exchange is that the Exchange accepts all documentation in English and by e-mail.

An issuer would need an EU-based regulated investment firm (Eurivex Ltd. – eurivexstage.mystagingwebsite.com) to act as the Investment firm signing the application and also appoint a Payment Agent in addition to completing the other documentation.

Eurivex, a regulated by CySEC investment firm provides complete packages directly or through other professional firms.

Eurivex will prepare the Information Memorandum as well as Terms and Conditions of the bond issue and liaison with the Vienna Stock Exchange until the listing is secured.

CLEARING & SETTLEMENT, TRADING

The Issuer also needs to furnish evidence that it meets the requirements for including in trading pursuant to Exchange rules, but Issuer has free choice of clearing system while its Global certificates have to be deposited with Euroclear, Clearstream Luxembourg, the Austrian central custodian OeKB or other custodians having a clearing link with OeKB.

Bonds are traded on Xetra trading system, but Issuer is under no obligation to provide liquidity/to quote, since no actual trading is legally required.

DOCUMENTS REQUIRED          

Issuer will need to furnish full corporate documents including Certificate of Incorporation, Shareholder and Director Registry, Memorandum & Articles of Association as well as provide basic KYC documentation of Company directors/principal owners.

Issuer will also provide additional information in order for Eurivex to prepare the Information Memorandum and other documents required for the listing.

TIME FRAME

When all the documents in the correct form have been provided, it will take Eurivex 1-2 weeks to prepare and submit the first draft Information Memorandum to the Vienna Stock Exchange for review, secure the AT-ISIN, complete the bond dematerialization and electronic delivery to OeKB and secure the final listing approval after 1 week.

LISTING FEES

Eurivex offers competitive packages covering all the fees, including the Vienna Stock Exchange listing, securing of AT-ISIN, bond registry dematerialization and electronic delivery to OeKB, listing agent and payment agent fees per bond listing (ISIN).

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November 3, 2011 5:44 pm

Eurivex, a regulated Cyprus investment firm is an approved Nomad for listings on the Emerging Companies Market of the Cyprus Stock Exchange (ECM) under simplified listing rules.

The Cyprus Stock Exchange, a eurozone member exchange allows private or public companies domiciled in any jurisdiction in addition to Cyprus to issue bonds and list them on the ECM of the CSE in record time.

Such a listing of bonds is ideal for:

  • Promoters who wish to raise money from other investors and are looking to operate through an approved regulatory structure,
  • Promoters who have lined up pension funds and other institutional investors wishing to invest in their project or company whose charter allows them to invest only in listed titles trading on recognized stock exchanges,
  • Companies who wish to bypass the banks and offer a better return to investors directly and by issuing their bonds, raise money

The ECM is very similar to what the AIM is for the London Stock Exchange with the added advantage that it’s a Multilateral Trading Facility (MTF) as defined by the EU’s Markets for Financial Instruments Directive (MiFID) and operated by an EU regulated stock exchange which the Cyprus Stock Exchange is.

The minimum amount of the bonds that can be listed on any eurozone stock exchange, including Cyprus is EUR 200.000 per listing.

The Bond Registry is maintained by the CSE in electronic format.

A Trustee will need to be appointed with a Trust agreement in place in order to protect the rights and act in the best interests of bond holders.

Once the bonds are listed, the CSE will provide the ISIN code allowing the bonds to be accessible by all professional investors using their Bloomberg or Reuters terminals.

The whole listing process takes 2 weeks to complete and the fees are very reasonable.

Companies interested to list their bonds on the ECM need to maintain a CSE approved Nominated Advisor (Nomad) to handle the listing procedures. Eurivex is an approved and experienced Nomad.

Eurivex can also handle the documentation for buying and selling of the bonds to be transacted on the CSE, which means the promoter or the company can find the buyers and sellers for its bonds and then leave the paperwork to Eurivex to complete.

Eurivex offers complete package for bond listings including finding all the professionals to make your bond issue a success.

 

Procedures to list the bonds

Basic Documents

A legal entity, based in any jurisdiction is eligible to issue and then list its bonds on the ECM.

Such a legal entity will need to provide the following documents:

  • Original or Apostile Certificate of Incorporation
  • Original or Apostile Share Capital certificate
  • Original or Apostile list of Shareholders
  • Original or Apostile list of Directors
  • Original or Apostile Registered Address

Companies should also provide a copy of their latest utility bill as proof of address.

2 year history or 3 year business plan

Existing companies may list their bonds based on their prior 2 year history, providing audited accounts based on according to International Accounting Standards. For newly setup companies, they may list the bonds based on forward looking business plan with financial projections for next 3 years with reasonable justification. cpr certification

Major shareholders

Major shareholders of private or public companies will have to provide their identity details (copy of passport or Identity card in case of EU nationals) as well as most recent utility bill copy as proof of address.

When shareholders are legal entities, full corporate documents as above are required.

All information provided will be open for public scrutiny. The CSE however allows the appointment of nominee shareholders and directors.

Board of Directors

The CV, educational and business background of all directors in addition to their basic identification and proof of address documents will need to be provided to the CSE. The information is open for public scrutiny.

Other officers

Every listed company on the ECM needs to appoint an approved by the Cyprus Stock Exchange Nominated Advisor (Nomad) which will be responsible for the company’s listing.

The company also needs to have a Trustee, registered office, legal advisor, auditor, and reveal the banks where it has a relationship.

Private placement of bonds

The Issuer can issue its bonds privately through a private placement and then list the bonds on the ECM of the CSE provided the minimum listing size is EUR 200.000, which is the minimum set for all eurozone stock exchanges.

The Issuer can complete the procedures for a bond listing for larger amounts and thereafter list the bonds in increments of EUR 200.000.

IPO

If the company wishes to hold an Initial Public Offering (IPO) after its application is approved, then it may do so but up to EUR 2.4 mln under simplified procedures.

If the amount of the IPO is above EUR 2.4 mln, then the company needs to prepare a prospectus and submit it to the Cyprus Securities & Exchange Commission for approval before it can proceed.

Otherwise, if the IPO is below EUR 2.4 mln, it will do so under simplified listing procedures and by submitting its Admission Document only.

Trustee

A trustee will need to be appointed and a Trust agreement signed between the Issuer and the Trustee.

The Trustee can be a lawyer or Trust Company based anywhere with the Trust agreement allowed to apply to any jurisdiction.

Admission Document

The Admission Document is prepared by the approved Nomad in cooperation with the client and includes details about the following:

  • Company history
  • List of major shareholders
  • List of directors
  • List of officers
  • Terms of the bond issue
  • 2-year prior history for existing companies or
  • 3-year forward looking financial projections for new companies
  • Reason why company is seeking a listing of its bonds on ECM
  • Future plans, including business plan with details about use of funds
  • Risk analysis and risk warnings.

Requirements for a successful listing

The role of the Nomad is critical to the listing process as it is for the Nomad to determine the company’s suitability for an ECM admission.

The Nomad is responsible for the company’s compliance with the ECM Rules for Companies on and following admission. The ECM Rules are published by the Cyprus Stock Exchange and set out the rules and responsibilities that an ECM company must comply with.

Reporting requirements

All companies that have listed securities on the ECM are required to comply with a number of ongoing obligations. The Nomad will guide the company on its ongoing compliance with the ECM Rules. The key considerations to bear in mind are:

  • Company needs to prepare and submit its Audited accounts within 4 months after financial year-end
  • Company needs to submit its first half management accounts (not audited) 2 months after end of first half
  • All Corporate action including notification for holing AGM/EGM, the results of the AGM/EGM, bonus share issues, mergers and acquisitions, changes in Directors, major shareholder transactions and announcements that will have a major impact on the bond price will need to be notified to the CSE
  • Company needs to pay its dues and obligations to CSE, its Nomad and other Cyprus professionals on time and without delay.
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  • Victory Tower, 1 st floor

  • Nicosia 1082, Cyprus

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Disclaimer & Regulatory information
Eurivex Ltd is a Cyprus Investment Firm, authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC), License number 114/10.
Company Reg. HE 255430. Headquartered and based in Cyprus, member of EU.

Risk warning: Investing in financial instruments and other derivatives involves a high degree of risk and may not be suitable to all investors. Trading in such financial instruments can result in both an increase and decrease in capital. If you invest through Eurivex Ltd, the value of investments may go down and your capital will be at risk. Eurivex Ltd operates a secondary market but there is no guarantee that all buy/sell orders will be completed at the desired prices and there is a risk that an order may not be completed in the Eurivex secondary market if there is no matching order. There is no guarantee that you will be able to exit early by selling your investment. Eurivex Ltd does not provide investment, tax or legal advice. If you are unsure about the suitability of an investment, you should speak to a financial adviser. Please refer to our Risk Warning available on our web site for further information.