The Cayman Islands Stock Exchange ("CSX") has introduced a new listing regime for securities issued by "specialist companies" to qualified investors. This new regime specifically caters for pre-IPO and other newly incorporated or pass-through companies with no specific revenue earning business or companies raising funding for a new project or line of business.
The listing rules for debt or equity securities issued by a specialist company are set out in a new Chapter 14.
In particular, it should be noted that: (i) there is no minimum subscription amount; and (ii) it is possible to list a specialist company without a two year track record of financial statements, provided the issuer either:
(a) provides a detailed business plan;
(b) is a wholly owned subsidiary of a listed company and included within the consolidated accounts of that holding company; or
(c) 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 14 for specialist companies implements appropriate disclosure requirements for these types of entities.
Other notable revisions introduced to the Listing Rules are:
(a) New definitions:
(i) 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.
(ii) 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.
(iii) 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.
(b) Investment funds – reference to new administrative fee for late NAV notifications.
(c) Corporate debt securities – extension of the time limit for submitting financial statements to the CSX post listing from six to nine months.
Full details of the 2017 Revisions can be viewed at the Cayman Islands Stock Exchange website.
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.