posted 10 Aug 2007 in Volume 10 Issue 3

Country report: CISX – An international exchange

By Tamara Menteshvili, chief executive, Channel Islands Stock Exchange

There is no doubt that The Channel Islands Stock Exchange (CISX) has gained wide international acceptance – as the approval of its 2000th listing in April 2007 confirms. The CISX combines flexibility with responsibility in providing screen-based trading and the listing of investment funds, specialist debt securities and shares in trading companies. Its differentiating features set it apart, including consistency of response; efficiency and swift turnaround of documentation; competitive costs; and approachability of the Market Authority (who meet daily to approve listing applications).

The exchange’s high standards and credible track record goes some way towards explaining its international appeal. At the same time, the CISX has several unique selling points, not least its efficiency and quick turnaround time. Indeed, this feature was one of the reasons that the CISX was voted Best Offshore Stock Exchange in 2006 for the second year running by readers of Investment International. It is a feature the Market Authority of the exchange has to manage carefully as business grows – and growing it is, with more than 300 admitted to the CISX Official List in the first five months of 2007 alone.

The CISX has come to play a significant role in attracting new business to the Channel Islands. It completes the range of services offered by the financial, professional and financial-services sectors in the Channel Islands. Although possessing many unique qualities and certainly having some distinct advantages over other exchanges in the same time zone, the CISX is a stock exchange like any other insofar as setting standards of public disclosure of information for the securities it lists and regulating the marketplace.

The CISX is in a unique position being outside the European Union but within the advantageous European time zone, and with the added benefit of having widely-held international recognition. The Listing Rules favour a disclosure regime rather than featuring a long list of prohibitions. Flexibility is what product designers are looking for and that is what the CISX offers. However, flexibility does not come at the expense of high standards.

The exchange’s infrastructure and Listing Rules have awarded the exchange formal recognition from some of the world’s leading economies such as the US and UK. That recognition includes from the US Securities and Exchange Commission, which granted the CISX Designated Offshore Securities Market under Regulation S; HM Revenue and Customs, under section 841 ICTA; and the UK’s Financial Services Authority (FSA), which granted the CISX Designated Investment Exchange status.

The Market Authority accepts a wide range of legal structures for admission to the Official List, including protected-cell companies and limited partnerships. Notable areas of growth in terms of recent listings activity include property funds, structured products and specialist debt sectors. Over half of the securities on the CISX Official List are domiciled outside the Channel Islands, which emphasises the exchange’s international outlook. The growing number of international issuers who have made the CISX their exchange of choice may depend on an individual, focused service – an approach that is in keeping with the way business is done in the Channel Islands.

The CISX market continues to develop, with trading volumes and turnover steadily increasing. The exchange offers a full listing and trading facility for commercial businesses and closed-ended investment companies, with market makers and an order book, and transactions have full CREST settlement. In March 2005, the exchange extended the trading facilities to open-ended investment companies. Shares that are partly paid shares may also be traded, which it is believed will be of particular interest to the private-equity sector.

The CISX is cost effective, offering a unique opportunity for those international businesses already attracted to the Channel Islands to take advantage of a personalised approach and fast-track processing of applications within a highly regulated and innovative marketplace.

Key strengths

The criteria for selecting which particular finance centre to do business with are similar to the criteria for choosing on which stock exchange to list securities. Such criteria include high regulatory standards; low costs; professional expertise; and efficiency of service.

It is anticipated that the differentiating features of the CISX will encourage new business to the Channel Islands. The key strengths of the exchange are as follows:

International standards of issuer regulation;
Timely and personal service;
Competitive pricing;
Enhanced marketability and added-value services;
Premier location.

The hallmarks of the Channel Islands – high standards and innovation – are reflected in the CISX and its approach to providing a service and structure unique within the European time zone. In looking towards the future, the Market Authority will build on its foundation values with the
aim of providing a service that is second to none.

Contact

For further information, please contact:

The Listing Department

The Channel Islands Stock Exchange

P O Box 623

One Lefebvre Street

St Peter Port

Guernsey GY1 4PJ

Tel: 01481 713831 (Guernsey)

Tel: 01534 737151 (Jersey)

Fax: 01481 714856

E-mail: info@cisx.com

Web: www.cisx.com