By Rosemary Wynne – One of the unique features of the Channel Islands Stock Exchange (CISX) is its Membership structure. In its short history, the CISX has more than doubled its membership – from twenty-four Founder Members at the launch of the CISX, to 57 Members twelve years on.The growing number of Members is very gratifying and demonstrates that the business model upon which the Exchange was based is as relevant today as it was at inception. Bulletin Board offers a special insight into the CISX business model.
Whilst there is no doubt that the CISX has fulfilled its objectives in enhancing the competitiveness of the Channel Islands as international finance centres, the CISX was designed to enable businesses to expand their corporate services and create business opportunities for its Members.
Each security admitted to the Official List has been sponsored by a CISX Listing Member through their global network of contacts and clients. And therein lies the essence of the Exchange’s success. The CISX commitment to personal service is borne out of the desire to enhance the business relationships of its Members’ clients.
To that end, the Market Authority works in partnership with its Members and the facilities of the CISX are a natural adjunct to the services that its Members provide.
At any one time there are over 25 countries represented on the CISX Official List and the CISX is rapidly approaching its 4,000th Listing. This growth in business and the ongoing success of the CISX is directly attributable to its Members. It is the CISX Members who provide the client network, the innovative product structures and first-class services, which in turn attract international businesses to the Channel Islands.
Membership Structure
The structure of the CISX has been specifically designed to differentiate it from other exchanges. In addition to the traditional type of stock exchange member (i.e. stock broker), the CISX’s membership structure allows Channel Island fund mangers, fund administrators, as well as law firms and accountancy firms who provide fund services and act for companies, to join the CISX as Listing Members. An issuer wishing to have its securities listed on the CISX is required to engage the services of a Listing Member who will act as sponsor.
A Member of the Exchange must be a corporation, partnership or legal entity licensed, regulated or supervised by a regulatory body in a recognised jurisdiction or be a member of a professional body approved by the CISX. In addition, an applicant for Membership must:
- satisfy the CISX Board that it is of sound financial standing and integrity;
- satisfy the Board that it is fit and proper to be a Member;
- comply with the Rules of the Exchange; and
- refrain from carrying on any other business inconsistent with its membership of the Exchange.
A CISX Member can be either a Listing Member or Trading Member or both.
A Listing Member must be established as an entity in the Channel Islands and must have suitably qualified staff to ensure proper co-ordination with the Exchange. An issuer wishing to have its securities listed on the Exchange is required to engage the services of a Listing Member who will act as a sponsor. There are two categories of sponsor:
- Category 1 Listing Members may sponsor all types of securities to listing, and
- Category 2 Listing Members that specialise in sponsoring the listing of investment funds.
Increasingly, Channel Islands’ organisations that have joined as a Category 2 Listing Member, specialising in the sponsoring of investment fund listings, have expanded their businesses to include the sponsoring of other types of securities on behalf of their clients, thus changing their status to a Category 1 Member. This illustrates how effective the CISX has been in broadening the scope of corporate activity for its Members and how their respective businesses have benefited from membership of the CISX.
With regard to Trading Membership of the Exchange, a CISX Trading Member may be an entity established outside the Channel Islands (but within a recognised jurisdiction) and in addition to compliance with the general qualifications of membership, must comply with the requirements of the Exchange’s Trading and Settlement Rules. A Trading Member may also register as a Market Maker in listed securities specified by the Trading Member, but in doing so will be required to comply with the Exchange’s obligations of a Market Maker.
The Market Authority understands the need for differentiation and innovation in a competitive marketplace and is well placed to meet the challenges of a demanding and diverse universe of product providers. The flexibility inherent within the CISX Listing Rules, coupled with the support of all the Members of the Exchange, with whom the Market Authority works in partnership, the Exchange’s Shareholders and the exceptional team at the CISX, have proved to be a successful formula with which to take the Exchange forward. The CISX will continue to build upon its foundation values and will aim to continue to provide an unrivalled service for its Members and their valued clients.
Added Value
The CISX also offers added value in marketing both the services of its Members and that of the securities listed on the Exchange. For example, through the use of its web-site, www.cisx.com the CISX not only promotes its services, but the products and services of its Members and listed entities. Each Member has a page on the CISX web-site, to include useful background information and contact details, with a further opportunity to link to their own internet web-site. This is proving to be a useful marketing tool.
Rosemary Wynne is the marketing manager for the Channel Islands Stock Exchange (CISX)
This article first appeared in the Spring 2011 edition of the Channel Islands Stock Exchange Bulletin Board
