Revised rules, new options for local companies
Thursday, 13 Dec 2018
Carolyn Gelling, Head of the Isle of Man Office at The International Stock Exchange Group (TISEG), explains how revised rules for listing trading companies on The International Stock Exchange (TISE) present new opportunities for local businesses.
On Friday 5 October TISE introduced revised rules for listing trading companies, in particular to appeal to growing businesses such as those in the Isle of Man.
There are numerous reasons why business owners may consider it beneficial to list their company on a stock exchange, such as TISE. These reasons might include one or more of the following: enhanced prestige and profile for the owners and their business; increased transparency and governance; a clearly defined price for the shares and a valuation of the business; provision of a stepping stone to another major global exchange; and a route to exit.
“In addition, a listing can provide access to another pool capital which will assist in scaling up a business.”
Accessing affordable capital is a challenge across the funding landscape and in terms of the capital markets, the significant expense and overly onerous requirements to gain admission to a traditional stock market are acting as a barrier to entry for many growth companies.
Revised rules for TISE
TISE can offer a much more cost effective option for scale up businesses to access the capital markets. Now we have updated our listing rules to ensure that they are sufficiently proportionate to provide an appropriate and attractive environment for these companies.
Some of the key elements of the new rules for trading companies are:
- The company must be worth at least £1 million, although the Exchange may permit a lower value;
- At least 25% of shares must be in ‘public hands’ (i.e. not those of Directors and therefore creating a market), unless otherwise agreed by the Exchange;
- Three years’ audited annual accounts, although this does not apply if the company has been operating for a shorter period and there may also be other exceptions; and
- Directors must provide a statement certifying that the company has sufficient working capital for at least 12 months or otherwise, how they propose to provide such capital to ensure its continued ability to trade.
“Now we have updated our listing rules to ensure that they are sufficiently proportionate…”
Trading companies currently listed on TISE include the Exchange Group’s parent company TISEG, as well as stockbroker Ravenscroft, property investment company Raven Property Group and a more recent addition, financial services group PraxisIFM.
How to list
Isle of Man companies wishing to list may find TISE more appealing than other stock exchanges because we have a proportionate fee regime and listing rules and also listing can be facilitated from the island both from via the locally based listing sponsors and our own office.
The company listed to provide clarity over its ownership, to enable it to attract and reward staff through equity-linked schemes, to give shareholders a visible price and market for their holdings, to widen the Group’s visibility internationally and to provide access to the capital markets as a way to help finance acquisitions.
An original version of this article appeared in Isle of Man Business365, November 2018.
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