As of November 1st 2016, Cyprus Stock Exchange listed firms have started dual listing onto the Frankfurt Stock Exchange. Business Listings Group has been known globally as the leader of listings on the first quotation board up until 2012. Changes in the market regulations in Frankfurt made it very difficult for small firms to direct list onto the Frankfurt Stock Market.
Business Listings now has the solution you have been waiting for, listings on the Cyprus Stock Exchange in 4-6 weeks and then “dual listing” onto the Frankfurt Stock Exchange! This can be completed for as little as 60,000 euro. A direct listing on the Frankfurt Stock Exchange would take months, even a year, due to the rigorous nature of the standard market within Germany.
Introduction – The Cyprus Stock Exchange Creates New Opportunities For Businesses Introduction
Business Listings Group is a UK corporation that has collectively as a team listed over 1,000 companies on public markets within its consortium including the CSE, TSX, Deutsche Borse (Frankfurt), LSE (AIM & Standard), Berlin, OTCQX, NASDAQ, NYSE Euronext, ASX (Australia), Luxembourg, Vienna, and Hong Kong. (And now the Cyprus Stock Exchange.)
The Cyprus Stock Exchange presents an amazing opportunity for listing a company on a public market, with all the benefits of a recognized listing on a stock exchange with low-cost regulatory requirements. We welcome the opportunity to work with you on the Cyprus Markets Listings of your firm.
Emerging Companies Market
On September 15 2009 the Cyprus Stock Exchange adopted Regulative Decision 326/2009, which governs the Emerging Companies Market. The Emerging Companies Market is a new financial market in Cyprus which is considered to be unregulated and does not come under the mandatory provisions applicable to regulated markets. Such provisions impose strict listing requirements and continuous reporting obligations on listed companies. The Emerging Companies Market is a multilateral trading facility that operates in accordance with the regulative decisions adopted by the Cyprus Stock Exchange, which will be exclusively responsible for setting the listing requirements and continuous obligations of issuers and directors, as well as any penalties to be imposed for rule violations.
The Emerging Companies Market creates new dimensions in the Cypriot financial world by offering numerous opportunities – for example, it:
- establishes an alternative method for securing finance at competitive costs that is raised by unlisted companies through simpler procedures than those for raising finance in a regulated market;
- creates increased awareness, recognition and prestige for listed companies; and
- increases investment sectors and opportunities for investors.
The Emerging Companies Market of the Cyprus Stock Exchange (ECM) is very similar to what the AIM is for the London Stock Exchange, but with the added advantages that it has very relaxed listing rules.
For example, in this market, there is
- no requirement for daily volume (hence no fictitious trades needed)
- no maximum ownership rule and (hence no need to do illegal stock parking)
- no minimum market capitalization criteria (even if value drops, no risk of de-listing)
- The whole listing process takes 6 weeks to complete, with 4 weeks of preparation work with advisors, and 2 weeks listing approvals and due diligence by the exchange.
Using the ECM/CSE to your best advantage
A listed company on the ECM/CSE is ideal for beneficial owners to:
- Allow pension and other regulated funds such as UCITS to invest in your listed titles (shares or bonds) as they can only invest in listed titles trading on recognized and regulated stock exchange,
- Use idle funds that need a justification to tax authorities before repatriation to home country to invest in various projects,
Have the share registry maintained electronically by the Cyprus Stock Exchange
Acquire other companies, listed or private, operating anywhere in the world either by cash or through share issue/swap to bring those companies under the control of the Cyprus holding PLC on the valuation suitable to beneficial owners so that there are no tax implications at the other end,
- Lend money to own entities operating in home country from Cyprus
- Issue shares to raise money from other investors
- Issue debt or bonds which can subsequently be listed on the CSE
- For new startups, a public company is formed with 10-12 shareholders, all of whom can be nominees and together with a business plan and 3-year financial forecasts, then list the shares on the ECM/CSE.
IFXBG Limited has a method to make sure that the UBO controls all the shares of the nominee shareholders, thus making sure that not even one share falls into wrong hands.
A listed company will require minimum 3 Directors, with 1 Director Executive to be responsible for the day-to-day affairs of the company. The other 2 can be non-executive directors.
All decisions are made by the Board who is answerable to shareholders once a year at the AGM.
Shareholders can vote through proxies at the AGM. The CSE maintains the Share Registry in electronic format. The CSE will also provide the ISIN code, available through Bloomberg/Reuters and closing prices are updated daily on the CSE’s web site, which is also available in English.
The CV, educational and business background of all directors will need to be provided to the CSE and is open for public scrutiny.
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.
FSE Listings and IFXBG Limited is partnered with two of the largest approved Nomads and offers a complete solution including finding the professionals to register the public company, prepare the Admission Document, pass the application through the CSE and manage the timeframe of the acting company’s Nomad, solving delays and problems before they happen.
The company also needs to have registered office, legal advisor, auditor, and reveal the banks where it has a relationship.
In accordance with Regulative Decision 326/2009, the key conditions for listing on the Emerging Companies Market are as follows:
The issuer must have readily available audited accounts and must be able to prove that it carried on its ordinary activities for at least two years before its application. Newly established companies can also be listed if the Cyprus Stock Exchange Council is satisfied that future shareholders are given satisfactory information in order to assess properly the value of the titles.
Throughout the flotation procedure, the issuer must have a nominated adviser (ie, a lawyer and auditor who is authorized to act as a nominated adviser by the Cyprus Stock Exchange).
The issuer must be registered as a public limited liability company. There are no minimum market capitalization or shareholder equity criteria.
Regulative Decision 326/2009 provides for the following three methods of effecting a listing:
initial public offering – this should aim to raise at least €2.5 million and should be addressed to over 100 persons; a prospectus will be required in such case;
private placement – this should be addressed to institutional investors or to fewer than 100 persons, and the capital to be raised must be less than €2.5 million; an admission document (a simpler version of a prospectus) must be submitted to the Cyprus Stock Exchange; or
a combination of the two above-mentioned methods.
Private placement of shares
Before the company is listed, it can organize a private placement of shares and raise money. There is no limitation on the amount raised, but if the shares are issued at a premium, then this needs to be justified to the CSE.
Once the private placement is completed, we shall then simply list the shares on the CSE. There is no requirement to hold an IPO. Existing shares are simply listed.
If the listed company wishes to hold an Initial Public Offering (IPO) after its application is approved, then it may do so but up to EUR 2.5 mln under simplified procedures.
If the amount of the IPO is above EUR 2.5 mln or the issue will be made to more than 100 investors, 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 2.5 mln or under 100 investors, it will do so under simplified listing procedures and by submitting the Admission Document only.
An issuer seeking to float securities on the Emerging Companies Market must submit the following documents:
- a completed application form as determined by the Cyprus Stock Exchange;
- an admission document containing information about;
- the background of the issuer and the issue;
- the business plan;
- the board members and shareholders;
- the associated business risks; and
- the audited accounts;
- a company board resolution authorizing the issue or placement of the securities;
- a copy of the company’s memorandum and articles of association, duly certified as a true copy of the original; and
- a prospectus (approved by the relevant Cyprus authority), if required.
- A corporate structure that enables the shares of the company to be traded on the exchange for clearing and settlement purposes
- A registrar that has the ability to dematerialize shares into the trading system
- A third party valuation of the assets of the company for the purpose of setting the listing price