An interview with CISX chief executive Tamara Menteshvili -
Over more than a decade, the Channel Islands Stock Exchange has provided essential supporting infrastructure for the financial sector in Guernsey and Jersey. In the investment fund industry, the exchange is central to the process of capital-raising from investors and to oversight of funds through the disclosure requirements of the listing regime.
How has the financial crisis affected the stock exchange?
The past two or three years have seen greater focus by investors on the transparency benefits of a listing. The exchange’s public disclosure regime is designed to provide information flows not only to investors but credit institutions that also rely upon the listing status of securities. The CISX requires directors of listed companies, including funds, to adhere to ongoing disclosure requirements regarding investors, trading counterparties and the public at large.
The CISX has always worked to ensure issuers understand fully the implications and practicalities of the listing rules, offering information and guidance through workshops, seminars and conferences – for example, an upcoming workshop on due diligence by issuers post-listing. This educational role has always been a key element of the exchange’s work, but in the aftermath of the financial crisis there’s even greater emphasis on disclosure and transparency and the role of listing in achieving these goals.
What does a listing on the CISX provide to issuers and investors?
A CISX listing broadens the eligibility of a fund to different categories of investor thanks to the recognised status of the exchange. For example, listing on a recognised exchange is necessary for securities to be eligible for certain UK tax-advantaged investment structures, such as ISAs and SIPPs; it is also necessary to obtain UK Reit status.
A listing facilitates both subsequent capital-raising through additional share issuance and secondary market trading. While many of CISX-listed securities, such as closed-ended fund shares, are often held by ‘buy and hold’ shareholders, the exchange nevertheless has a demonstrable track record in secondary market activity.
In respect of trading, how does the CISX differentiate itself?
The CISX is the only exchange that has extended trading facilities to open-ended funds (as opposed to classic ETFs), with five currently listed. Other recent innovations include trading in partnership interests – of particular interest to the private equity sector, which has also taken advantage of the ease of listing on the CISX debt securities relating to acquisitions.
How is the CISX developing given the economic downturn?
Like the financial sector as a whole, the exchange has felt the impact of the financial crisis and its aftermath since its record year for listings in 2007. But with more than 300 new listings expected in 2010 despite a still uncertain market environment, the recovery seems to be gathering momentum.
What are the significant growth trends?
A key growth area in 2010 has been structured funds, with three new issuers coming to the exchange this year, and there has been an upsurge of enquiries about the listing of UK Reits as well as alternative asset classes such as gold. As opportunities return, the exchange looks forward to delivering the transparent, efficient and professional service its growing number of international issuers requires.
Tamara Menteshvili is chief executive of the Channel Islands Stock Exchange
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