Cayman Islands: Cayman Islands Stock Exchange Listing Rules 2017 Revision
Article by Scott Macdonald, Anthony Philp, Andrew Quinn, Stacey Overholt, Jonathan Caulton, Julia Cornett and Jess Stock From Maples and Calder
The Cayman Islands Stock Exchange (“CSX”) implemented the 2017 Revision of the Listing Rules in April 2017.
In connection with this update, the CSX published a new chapter 14 in connection with listing debt or equity securities issued by “specialist companies”. The second part of chapter 14 covers offerings of debt securities to qualified investors, defined below, by companies that may be newly incorporated or pass-through SPVs with no specific revenue earning business or companies raising funding for a new project or line of business.
This will benefit Cayman incorporated issuers. It will also benefit issuers established in other countries, such as Ireland and the UK, who list their securities on the CSX. Such issuers may be engaged in standalone CLO / securitisation transactions, or may be part of an investment fund structure, typically where a Cayman Islands fund holds a European SPV.
In particular, it should be noted that the CSX will allow the listing of an issuer without a two year track record of financial statements, provided the issuer either:
provides a detailed business plan;
is a wholly owned subsidiary of a listed company and included within the consolidated accounts of that holding company; or
satisfies the CSX that acceptance of a shorter period is in the interest of the applicant or of the investors and that investors have access to such financial and other information deemed necessary or appropriate in order to make an informed decision with respect to the issuer and the securities.
This new chapter for specialist companies implements appropriate disclosure requirements for these types of entities.
Other notable revisions introduced to the Listing Rules are:
New definitions:
Qualified investors: defined as an investor who is a qualified purchaser and represents in writing to the issuer that they are particularly knowledgeable in investment matters or is a director or manager of the issuer and is particularly knowledgeable in investment matters.
Qualified purchaser: defined as any individual who owns not less than US$1 million in investments or any entity that in the aggregate owns and invests on a discretionary basis not less than US$5 million in investments.
Particularly knowledgeable in investment matters: refers to investors who: (1) have the knowledge and experience in financial and business matters to enable them to evaluate the merits of a proposed transaction and investing in the issuer; (2) are aware of the risks inherent in investing in the securities; and (3) can afford the loss of their entire investment.
Investment funds – reference to new administrative fee for late NAV notifications.
Corporate debt securities – revision to the time limit for submitting financial statements to the CSX post listing.
Full details of the 2017 Revisions can be viewed here.
The CSX is a “recognised stock exchange” for quoted Eurobond exemption purposes in respect of Irish and United Kingdom withholding tax. It specialises in listing asset backed debt and corporate debt.
Maples and Calder is the market leader with respect to debt and equity listings on the CSX, advising on the most complex and bespoke transactions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
