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Disclosure rules for listing on an exchange

Thursday 19 January 2012 – by Tamara Menteshvili

 Meeting disclosure rules is a key requirement when listing, writes Tamara Menteshvili, founding director and chief executive of the Channel Islands Stock Exchange in her second article on the process for listing on an exchange.

The first article in this series highlighted the various considerations to explore before deciding whether listing on an exchange was the best course of action.

Once the decision to list has been reached, issuers must be aware of their ongoing commitments and obligations throughout the process.

In 2011, for instance, the Channel Islands Stock Exchange admitted nearly 500 new securities to its Official List – a 40 per cent increase on 2010. A significant proportion of those would have been new to market and will have needed to understand and act upon the disclosure requirements for the first time.

The Exchange’s public disclosure regime is designed to provide information flows not only to investors but credit institutions that may also rely upon the listing status of securities.

It is a requirement of the CISX and of company law both within the Channel Islands and the UK that directors of listed companies know and understand the listing rules of the relevant exchange where their securities are listed.


Therefore the Market Authority at the CISX puts a lot of effort into ensuring that members and directors of CISX listed issuers understand their obligations.

Naturally with all listings, there will be conditions to meet and documents to prepare for vetting by the exchange. The application process varies depending on the type of product and its structure and whether the shares are already in issue prior to an application being made or whether some other process is envisaged such as a private placement.

Support

In this regard, the listings department receives significant and valuable support from the exchange’s listing members as part of the application process prior to the submission of documents to the exchange for consideration.

The listing member, or sponsor, will focus on the due diligence aspects of the process to ensure that the issuer and the underlying security are in fact suitable for listing.


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