Cayman Islands Stock Exchange - XETRA Launch and 2013 Listing Rules Update
CSX XETRA Launch
The Cayman Islands Stock Exchange ("CSX") went live on the Deutsche Boerse XETRA® trading platform on 25 March 2013. To facilitate this launch, in conjunction with a periodic update, the CSX implemented the 2013 Revision of the Listing Rules on 30 April 2013 (see below).
XETRA is Deutsche Boerse’s international cash market platform for trading equities, bonds, warrants, exchange traded funds and other instruments. The CSX will be accessible through the FIX Gateway under the market information code 'XCAY', which allows trading for equities, debt and other securities listed on the CSX.
Trading on XCAY can be undertaken through existing CSX broker members. Existing XETRA participants can be passported through a simple process as CSX broker members and will be able to use their existing XETRA connection to trade on XCAY.
Trading on XCAY will be Monday to Friday, continuously, with main trading between 7:00am and 12:30pm Cayman Islands time (12:00pm to 5:30pm GMT).
Trading and Order Book
Trading is internet-based, enabling members to access XETRA via a standard web browser. Through the XETRA system, broker members interact with a central, electronic order book on an order matching basis.
Prearranged trades between broker members may be posted on XETRA through its OTC trading facility.
The CSX will not charge trading fees for any securities listed on the CSX. This 'fees guarantee' will remain in place until at least March 2015.
Clearing and Settlement – ISIN Requirement
To be admitted to listing and trading on the CSX, securities must have an ISIN1. The CSX can supply ISINs for Cayman Islands and BVI incorporated equity issuers or investment funds and can direct ISIN enquiries for other products.
Listed securities (other than those of open-ended investment funds) must be eligible for deposit in an acceptable electronic clearing and settlement system including Clearstream Banking Luxembourg, Euroclear, The Depositary Trust Company or any acceptable alternative system agreed in advance with the CSX. For debt securities (including specialist debt securities and corporate debt securities – 'eurobonds') where the securities are to be privately placed with a small number of institutions or qualified purchasers, the CSX may accept alternative arrangements provided they facilitate the efficient clearance and settlement of all trades.
Listing Rules 2013 Revision
In addition to the revisions to introduce the eligibility for electronic clearing and settlement requirement noted above in connection with the XETRA launch and general updates, the following material revisions have been introduced:
Chapter 9 (Investment Funds) - "Mutual Funds" have been rebranded as "Investment Funds" to better reflect the market served by the Cayman Islands.
New rules have been introduced for:
(a) higher standards of governance and operation, including directors' suitability and disclosure requirements;
(b) "Retail Funds" (funds with a minimum investment of less than US$100,000); and
(c) Exchange Traded Funds and Forestry Funds.
Chapter 6 (Equity) – New rules introduced to:
(a) increase the investment threshold for start-up and mineral companies;
(b) raise the suitability and disclosure requirements for equity issuers; and
(c) facilitate listings by shipping companies.
Chapter 5 (Listing Agents) – To attract fund listings from other jurisdictions, non-Cayman listing agents may now be appointed. With the exception of "specialist companies", equity issuers under the Chapter 6 rules must appoint a 'corporate advisor' as their listing agent (i.e. a firm specialising in corporate finance, based in a recognised jurisdiction).
Chapter 12 (Corporate and Sovereign Debt Securities) – "Eurobonds" have been rebranded as "Corporate and Sovereign Debt Securities" to match market terminology.
Financial Statements Waiver – The previously available waiver from the requirement to prepare financial statements for issuers whose financial statements are consolidated into those of a listed parent has been withdrawn. An application for a waiver from this requirement must now be made under the general non-publication provision in Chapter 2.
De-listing – The requirements for de-listing following a full redemption or liquidation have been relaxed.
Full details of the 2013 revisions can be viewed here.
Detailed guides to listing on the CSX can be found on the Practical Law Company website. Please click here to view a guide on Debt Capital Markets in the Cayman Islands, and here for a guide on Equity Capital Markets in the Cayman Islands.
For further information, please speak to your usual Maples and Calder contact or one of the individuals listed above.
1Please note that existing CSX listed issuers whose securities do not currently have ISINs are not grandfathered and have an initial period of six months to obtain ISINs.