The Irish Stock Exchange (the "ISE") has been in existence for over two hundred years. Its long association with the London Stock Exchange, of which it was a branch until 1995, and its commercial approach to listing have together contributed to ensuring a high standard of regulation and an efficient listing process. Ireland is a Member State of the European Union and the Irish Stock Exchange is, therefore, a recognised EU stock exchange.
In 1999, the ISE implemented a listing regime for listing most specialist debt securities and has subsequently emerged as one of the leading European stock exchanges for the listing of debt securities, including:
- Asset Backed Securities
- Covered Bonds
- Derivative Securities
- Global Collateralised Note Programmes
- High Yield Bonds
- Islamic Certificates
- Loan Participation Notes
- Medium Term Notes
- Structured Finance Securities
- Whole Business Securitisation Programmes
The introduction of these listing rules together with the ISE's pragmatic approach has lead to it's phenomenal success and has resulted in it becoming one of the most popular stock exchanges on which to list.
Why list on the ISE?
From listing 200 securities in 2,000, the debt listing business has grown to currently listing over 25,000 debt securities, from over 45 jurisdictions around the world.
Issuers, Arrangers and Law Firms need certainty and consistency when choosing a listing jurisdiction. The following factors have lead to the ISE's sustained success:
- experience/specialist product knowledge – the ISE and CBI have a dedicated, technically proficient team and also a policy of senior involvement in all deals;
- consistent application of a comprehensive set of listing rules - all structural comments addressed up front, no surprise comments at the end;
- timing – the ISE and CBI guarantees and commits to comments on the first submission of an offering document within three days;
- a streamlined user-friendly listing process that combines a high level of technical knowledge and commercial approach necessary in order to respond to the most complex and sophisticated transaction;
- flexible approach, where necessary, especially when faster turnaround is required towards approval date;
- choice of markets - issuers can list debt securities on the Main Securities Market, an EU regulated market or the Global Exchange Market, which is not subject to EU regulation.
Advantages of listing on the ISE
There are many reasons for obtaining a listing for specialist debt securities on the ISE.
- One of the most important reasons is to facilitate institutional investors, many of which are required to hold at least 90% of their investments in listed securities. With only 10% of their funds available for investment in unlisted securities they are unlikely to invest in securities if listing is not sought. Listed securities will therefore be in demand.
- Particularly with respect to eurobonds and MTNs, listing can help liquidity in an issue therefore creating a better market.
- A listing on a long established, recognised and reputable stock exchange can raise the status of the securities and provide a very valuable marketing tool.
- A listing will assist in ensuring that interest can be paid without any withholding tax by relying on the "Quoted Eurobond Exemption".
To apply for the admission to trading of a specialist debt security on the ISE, the issuer must appoint a listing agent which is registered with the CBI and ISE. A listing agent is responsible for ensuring that the issuer is guided and advised on their application and is responsible for all communications with the Central Bank and ISE with regard to the relevant annexes to the Commission Regulations or the GEM Listing Rules, the listing process and all post listing obligations that may apply.
The Prospectus Directive, ("PD") came into force on 1st July 2005, under the Prospectus (Directive 2003/71/EC) Regulations 2005.
The main objective of the PD is to standardise the method, across the EU, by which an offer of securities can be made to the public and the way in which securities can be admitted to trading on a regulated market in an EEA country. This must be done by way of a prospectus ("Prospectus") and the Prospectus must be approved by the Competent Authority in the Member State in which the Issuer chooses to apply for admission to trading on the regulated market of the ISE.
In Ireland, this authority is the Central Bank of Ireland.
On July 1, 2012, Directive 2010/73/ EU (the "Amending Directive") was implemented in Ireland to update the Prospectus Directive. The main change brought about by the implementation of the Amending Directive was the standardising of the requirements of a Summary to a Prospectus for retail issuers and to give clear guidance on the Form of Final Terms. These changes have not disrupted the listing process in Ireland and Arthur Cox and Arthur Cox Listings are happy to provide further guidance in relation to the Amending Directive.
Choice of Markets for Listing
The ISE operates two markets for listing debt securities. Issuers can opt to list debt securities on either the Main Securities Market or the Global Exchange Market.
Main Securities Market ("MSM") - The Main Securities Market complies with the requirements of European Directives in relation to securities listed and admitted to trading on the Main Securities Market of the ISE. It is recognised as a leading European Regulated Market for the listing of debt securities and it is the market of choice for many Issuers. There are over 50 jurisdictions presently listed on the Main Securities Market.
Global Exchange Market ("GEM") - The Global Exchange Market is the exchange-regulated market of the ISE. Currently over 200 High Yield deals are listed on GEM, from the EU and Latin America including Plain Vanilla, Upstream Guarantee Structures, LBO, M & A and Balance Sheet Restructuring issues. GEM does not fall within the scope of the EU regulated markets as defined in MiFID and therefore the requirements of the Prospectus Directive and the Transparency Directive do not apply. GEM offers a greater degree of flexibility than can be afforded to issuers choosing the regulated market and is seen as a viable alternative to issuers who may not be in a position to meet the requirements of the Prospectus Directive. Securities listed on GEM are considered to be "quoted on a recognised stock exchange". Some issuers choose to list on GEM in order to avail of the "non-publication requests", which means that your approved Listing Particulars is not available on the ISE website.
For admission to trading on the Regulated Market, the issuer must prepare and submit a Prospectus to the Central Bank and ISE. The Prospectus must comply with the requirements of the Prospectus Directive, the Commission Regulations and the ISE conditions for listing.
For admission to trading on GEM, the issuer must prepare and submit a Listing Particulars to the ISE. This Listing Particulars falls outside of the requirements of the Prospectus Directive and Commission Regulations and must only comply with the ISE's GEM Listing and Admission to Trading Rules.
If there is any doubt as regards the suitability of a transaction for listing, Arthur Cox Listing will liaise with the Central Bank and ISE prior to formal submission. Once the process is started, Arthur Cox Listing is responsible for all communication with the CBI/ISE and ensuring an efficient listing process.
A draft version of the document must be submitted, via the Listing Agent to the Central Bank/ISE in electronic format, annotated against the relevant Annexes of the Commission Regulations, the ISE conditions for listing and/or the GEM Listing and Admission to Trading Rules. Arthur Cox Listing will review and annotate the draft document and complete the necessary checklists prior to an initial submission being made to the CBI/ISE.
At final approval stage, the Central Bank and ISE require certain support documents to be submitted. Arthur Cox Listing will prepare these support documents and arrange for their execution prior to the document being submitted for final approval.
Is an Irish Paying Agent required?
If listing on the regulated market, an Irish Paying Agent is not required. However, an agent is required and that agent must be able to hold documents and have them available for inspection in the Home Member State in line with Regulation 25(4) of Transparency (Directive 2004/109/EC) Regulations 2007. If necessary, Arthur Cox Listing, as Listing agent, can provide this service on behalf of the issuer.
If listing on GEM, an Irish Paying Agent is not required as long as there is a Paying Agent in place somewhere in the world.
Ireland has committed to very aggressive and set turnaround times on all documents submitted for review. These timeframes are three working days for first submissions and two working days for all subsequent submissions. Approval happens on a same day basis. This applies to both markets.
Any document, which is approved by the Central Bank, may be passported into another EU jurisdiction under the Prospectus Directive. In order to passport the document to the relevant jurisdictions, a passport request must be submitted to the Central Bank. Once it is confirmed that passporting is required, Arthur Cox Listings will prepare the passport request and submit it to the Central Bank.
Timing for Passporting
Where a passporting request is submitted at approval stage, the Central Bank have until close of business the following day to passport the document to the relevant jurisdictions, under the Prospectus Directive.
Where the passport request is submitted post approval, the Central Bank have three business days to passport the document.
Post Listing Obligations
Securities admitted to trading on the MSM are subject to certain obligations of the Transparency Directive, the Prospectus Directive and the Market Abuse Directive.
Securities admitted to trading on GEM are subject the continuing obligations of the GEM Listing Rules.
Arthur Cox Listings can provide guidance on the continuing obligations of an Issuer with securities admitted to trading on a case-by-case basis.
The CBI and ISE listing costs are competitive with other jurisdictions.
Arthur Cox Listing are happy to provide a breakdown of the CBI and ISE fees for any potential transaction. The CBI and ISE fees are transparent and issuers will not encounter any "hidden extras".
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.