Listing Shares on Emerging Companies Market of the Cyprus Stock Exchange
The Emerging Companies Market of the Cyprus Stock Exchange (ECM) is very similar to what the AIM is for the London Stock Exchange, but with the added advantages that it has very relaxed listing rules.
For example, in this market, there is
- no requirement for daily volume (hence no fictitious trades needed)
- no maximum ownership rule and (hence no need to do illegal stock parking)
- no minimum market capitalization criteria (even if value drops, no risk of de-listing)
The whole listing process takes 2 weeks to complete and the fees are very reasonable.
Using the ECM/CSE to your best advantage
A listed company on the ECM/CSE is ideal for beneficial owners to:
- Allow pension and other regulated funds such as UCITS to invest in your listed titles (shares or bonds) as they can only invest in listed titles trading on recognized and regulated stock exchange,
- Use idle funds that need a justification to tax authorities before repatriation to home country to invest in various projects,
- Have the share registry maintained electronically by the Cyprus Stock Exchange
- Acquire other companies, listed or private, operating anywhere in the world either by cash or through share issue/swap to bring those companies under the control of the Cyprus holding PLC on the valuation suitable to beneficial owners so that there are no tax implications at the other end,
- Lend money to own entities operating in home country from Cyprus
- Issue shares to raise money from other investors
- Issue debt or bonds which can subsequently be listed on the CSE
For new startups a public company is formed with 10-12 shareholders, all of whom can be nominees and together with a business plan and 3-year financial forecasts, then list the shares on the ECM/CSE.
Eurivex has a method to make sure that the UBO controls all the shares of the nominee shareholders, thus making sure that not even one share falls into wrong hands.
A listed company will require minimum 3 Directors, with 1 Director Executive to be responsible for the day-to-day affairs of the company. The other 2 can be non-executive directors.
All decisions are made by the Board who is answerable to shareholders once a year at the AGM.
Shareholders can vote through proxies at the AGM. The CSE maintains the Share Registry in electronic format. The CSE will also provide the ISIN code, available through Bloomberg/Reuters and closing prices are updated daily on the CSE’s web site, which is also available in English.
The CV, educational and business background of all directors will need to be provided to the CSE and is open for public scrutiny.
Every listed company on the ECM needs to appoint an approved by the Cyprus Stock Exchange Nominated Advisor (Nomad) which will be responsible for the company’s listing.
Eurivex is an approved Nomad and offers complete solutions including finding the professionals to register the public company, prepare the Admission Document, pass the application through the CSE and act as the company’s Nomad offering solutions to most of your problems.
The company also needs to have registered office, legal advisor, auditor, and reveal the banks where it has a relationship.
Private placement of shares
Before the company is listed, it can organize a private placement of shares and raise money. There is no limitation on the amount raised, but if the shares are issued at a premium, then this needs to be justified to the CSE.
Once the private placement is completed, we shall then simply list the shares on the CSE.
There is no requirement to hold an IPO. Existing shares are simply listed.
If the listed company wishes to hold an Initial Public Offering (IPO) after its application is approved, then it may do so but up to EUR 2.5 mln under simplified procedures.
If the amount of the IPO is above EUR 2.5 mln or the issue will be made to more than 100 investors, then the company needs to prepare a prospectus and submit it to the Cyprus Securities & Exchange Commission for approval before it can proceed.
Otherwise, if the IPO is below EUR 2.5 mln or under 100 investors, it will do so under simplified listing procedures and by submitting the Admission Document only.
Eurivex Limited is a Cyprus regulated investment firm regulated by Cyprus Securities & Exchange Commission (CySEC, # 114/10), licensed to trade in shares, bonds and forex through online trading platform. Eurivex is licensed to offer portfolio or asset management and hold client funds in safe custody.
Eurivex has also been accepted as a Nominated Advisor for listings on the Emerging Companies Market of the Cyprus Stock Exchange.