This Client Briefing has been prepared for the assistance of directors of companies which have listed "debt securities" under Chapter 8 of the Listing Rules (the Listing Rules) of The International Stock Exchange Authority Limited (the Authority).
The Client Briefing summarises the continuing obligations which an issuer is required to observe once any of its debt securities have been admitted to listing and should be read in conjunction with Ogier's Client Briefing entitled: The International Stock Exchange (formerly known as The Channel Islands Securities Exchange Authority Limited or CISEA): Chapter 8 Debt Listings'.
2. Nature of obligations
It is a condition of listing that an issuer executes a listing undertaking to comply with the Listing Rules and, in particular, with all relevant continuing obligations. Observance of the continuing obligations is essential to the maintenance of an orderly market in debt securities and to ensure that all users of the market have simultaneous access to the same information. Failure of an issuer to comply with any applicable continuing obligation may result in the Exchange taking the enforcement actions described in Chapter 3 of the Listing Rules.
Compared with other European securities exchanges, the information that is required to be disclosed on an annual basis to the Exchange in respect of debt listings is not onerous. Any information to be provided pursuant to an issuer's continuing obligations under the Listing Rules will not normally be made publicly available by the Exchange unless, for example, such information relates to a change in the debt securities listed, the name of the issuer or another matter material to the interests of holders of the debt securities.
Some typical examples of disclosable matters which might arise during the maintenance of a debt listing on The International Stock Exchange (TISE or the Exchange) follow: change of directors (including the provision of certain further information in respect of such directors - see 'Issuer board changes: appointments' below), change of issuer's name, the filing of annual audited or non-audited accounts (see 'Financial information' below), changes in the Listing Document and redemption of debt securities listed. If an issuer is ever in doubt as to whether circumstances relating to debt securities listed must be disclosed to TISE, we advise the issuer to contact us regarding this.
The Listing Rules are available on the website of TISE
3. General disclosure obligation
Generally and apart from compliance with all the specific requirements of the Listing Rules, the issuer shall keep the public, TISE, the holders of the debt securities of the issuer and other holders of its listed debt securities informed as soon as reasonably practicable of any information relating to the issuer (including information on any major new developments in the issuer's sphere of activity which is not public knowledge) which:
- is necessary to enable them and the public to appraise the position of the issuer;
- is necessary to avoid the establishment of a false market in its debt securities; and
- might reasonably be expected materially to affect market activity in and the price of its debt securities.
4. Duty to notify TISE
Information that is required to be disseminated pursuant to the Listing Rules must not be given to a third party before it is notified to TISE except as permitted by the Listing Rules. An issuer may give information in strict confidence to its advisers, an agent employed to release the information, and to persons with whom it is negotiating with a view to effecting a transaction or raising finance, including prospective underwriters of an issue of debt securities, providers of finance or loans or the placees of the balance of a rights issue not taken up by shareholders. In such cases, the issuer must advise the recipients of such information that it is confidential and that they should not deal in the issuer's debt securities before the information has been made available to the public. An issuer shall notify information to TISE by the method laid down by TISE from time to time.
An issuer whose debt securities are listed on TISE and on any other exchange must ensure that equivalent information is made available at the same time to TISE and such other exchanges. An issuer with equity securities listed on another exchange may satisfy this requirement by stating on TISE’s website where such equivalent information may be obtained.
5. Issuer board changes: appointments / resignations
All issuer board changes (appointment, resignation or removal of directors) must be notified to TISE within 14 days, otherwise a breach will be noted on the breaches register.
For issuer 'Know Your Customer' (KYC) or due diligence purposes, upon notification of any change in members of the board of an issuer, unless otherwise agreed by TISE, any newly appointed director must provide a signed Directors' Declaration (PQ) in the form prescribed by Listing Rule 220.127.116.11(l).
A copy of the board resolutions (or extracts therefrom) notifying any change in the members of the board must also be provided to TISE.
6. Financial information
Unless otherwise agreed with TISE, the issuer shall within nine months of the end of the period to which its audited annual accounts or unaudited financial statements relate:
- if the issuer is not required under the laws of its country of incorporation to publish audited accounts, to provide one copy of its annual report and accounts to Ogier Corporate Finance Limited (OCFL) who will file them with TISE; or
- if the Issuer is required under the laws of its country of incorporation to publish audited accounts, to provide one copy to OCFL who will file them with TISE using the Market Data Management Service (MDMS) or include a link to publicly available information placed on the Internet. MDMS filing of such financial information will mean that it is publicly available via TISE's website. Where issuers publish financial statements online TISE may be referred to relevant online data sources.
In the event of late, or non-filing of audited annual accounts or unaudited financial statements, TISE will levy a £1,000 late filing fine. It is therefore important that such accounts or unaudited financial statements are provided to OCFL as soon as possible.
The issuer shall within 14 days of the occurrence of the event disclose to TISE by instructing OCFL to make an MDMS filing:
- any change in the rights, powers or privileges of any class of listed debt securities, including (but not limited to), unless otherwise agreed by TISE, any changes in the terms of any class of listed securities into which the listed debt securities are convertible or for which they are exchangeable;
- any decision to call, purchase, redeem or cancel any of the listed debt securities by the issuer and, where applicable, make an application to de-list such debt securities. The information must also state the amount of the debt securities to be called, purchased, redeemed or cancelled and the amount of debt securities to be outstanding after the transaction or series of transactions is completed;
- any decision to change the issuer’s constitutional documents;
- any appointment of a new director or a resignation or removal of a director (including the appointment or a resignation or removal of a corporate director); in the case of an appointment, the issuer shall also state whether the position is executive or non-executive and the nature of any specific function or responsibility; and
- any changes to any disclosed functions or executive responsibilities of a director; such notification shall also state the effective date of the change.
In addition to the above, the issuer is also required to immediately disclose the following to TISE (again, by instructing OCFL to make an MDMS filing):
- a change in its registered office;
- a change in its name; and
- a change in its auditors.
8. Convertible debt securities
If the listed debt securities may be converted into or exchanged for securities of another company, or are guaranteed by another company, the issuer must ensure that adequate information is at all times available to TISE and the holders of the listed debt securities:
(a) concerning the business and affairs of the other company; and
(b) concerning the rights, powers and privileges of the securities into which the listed debt securities are convertible or for which they are exchangeable.
As a minimum the information provided to satisfy subsection (a) of this Listing Rule must include the annual report and accounts of the company, any interim financial accounts, and all other information necessary for a realistic valuation of the listed debt securities to be made.
If the debt securities may be converted into or exchanged for securities of another company whose securities are listed on another exchange recognised by TISE, the issuer may satisfy the requirement to publish financial information in respect of the issuer on TISE by stating on TISE’s website where information may be obtained in respect of the company issuing the other securities.
9. Review of documents by TISE
In addition to the specific requirements set out in the Listing Rules, the issuer shall submit to TISE, for review, copies of drafts before they are issued of any announcements or advertisements the subject matter of which involves a change in or relates to or affects arrangements regarding trading in the listed debt securities on TISE, including suspensions or cancellations of listings.
10. Documents to be submitted to TISE
The issuer shall submit to TISE, as soon as practicable after they are issued, one copy in PDF format of the following:
- all resolutions of the issuer in respect of the listed issue, passed other than in the ordinary course of business;
- any document relating to a take-over of, merger by or offer to purchase the issuer;
- all notices of meetings in relation to the debt securities;
- forms of proxy, reports and announcements in relation to the listed issue; and
- any other similar documents.
The issuer shall submit one copy to TISE of any document sent by the issuer (or on its behalf) to holders on the issuer's listed issue as soon as practicable after such documents are issued.
11. Transfer of holding of debt securities: issuer confirmation
Where an issuer has given an undertaking or confirmation that it will not register a transfer of any debt securities without the prior consent of TISE (such consent not to be unreasonably withheld), the issuer must ensure that it seeks such consent prior to any transfer occurring.
In practice, such an undertaking will only have been required by TISE at the time of listing in very limited circumstances.
12. Annual fee
The Exchange charges an annual fee of £1,100 per class of debt securities listed. The first annual listing fees will be payable in advance along with the initial listing fee. Subsequent annual fees will be payable within 30 days of the anniversary of the listing date. TISE has indicated that debt securities may be delisted if the annual fee is not received within this timeframe.
Should an issuer whose debt securities are granted a listing on TISE fail to pay the prescribed initial and annual fees to TISE in accordance with the Listing Rules, then TISE may suspend dealing in or cancel the listing of the issuer’s debt securities (as the case may be), at TISE discretion.
13. What is the process for listing payment in kind notes ("PIK Notes", also known as "Funding Bonds")
It is possible to list PIK Notes on TISE.
Typically, OCFL will apply for in principle consent to list PIK Notes, as and when they are issued, at the time of making the listing application for the admission of the principal debt securities to be listed. Application can be made to list an unlimited number of PIK Notes or alternatively an "up to" number or ceiling can be set.
Please note that if any PIK Notes to be listed are fully fungible with the existing debt securities (i.e. they are to form a single series/the same class as the existing debt securities), then the PIK Notes must be listed as soon as possible after they are issued (ideally on the same day). Otherwise, if they are not the issuer will be in breach of the Listing Rules (all debt securities forming the same class must be listed when they are issued). If the intention is for the PIK Notes not to be fully fungible with the existing debt securities, then the first PIK Notes that are issued can be listed following issuance. However, any further PIK Notes that are issued will be fully fungible with the first PIK Notes and should therefore be listed as soon as possible after they are issued. We can advise on the most efficient process to deal with listing PIK Notes on an on-going basis.
14. Enforcement actions
If TISE considers that an issuer has contravened the Listing Rules it may do one or more of the following:
- censure the issuer, which may include a formal written notice of censure being served upon the issuer and the requirement that the issuer provide a written explanation of its actions to TISE and an undertaking to rectify the breach immediately;
- publish the fact that the issuer has been censured for failing to comply with the Listing Rules;
- refer the matter to the relevant criminal prosecuting authorities if empowered to do so; and
- suspend or cancel the listing of all or any of the issuer's debt securities where TISE considers it necessary for the protection of investors or the maintenance of an orderly market.
Unless TISE considers that the maintenance of the smooth operation of the market or the protection of investors otherwise requires, TISE will give advance notice to the parties involved on any action which it proposes to take and will give them an opportunity to make representations to TISE.