Financial Services Regulatory

Tornaritis Law Firm holds a specialist licence from the Cyprus Stock Exchange as a Nominated Advisor for Cyprus Stock Exchange Emerging Companies Market (“ECM”).
We have a strong regulatory-compliant department which lends weight to any prospective listing in the eyes of both the CSE and potential investors.
The initial role of the Nominated Advisor (“NOMAD”) is to ensure that the company is appropriate to be quoted on the ECM (“of the Cyprus Stock Exchange”) and ensure that the relevant rules are complied with on flotation.
A NOMAD must be retained at all times to advise the company and to ensure that it complies with the relevant ECM rules on an ongoing basis.
The Firm has a long-standing reputation as a leading international law firm. Thus, it has been well-positioned to take advantage of the trend towards globalization of the commercial and financial affairs of both Cyprus and foreign business entities.
CYPRUS: The location of choice for Floating in the Cyprus Stock Exchange creates new opportunities for companies
Floating on the E.C.M Emerging Companies Market
Overview
CSE’s Emerging Companies Market (ECM) is similar to the AIM for the London Stock Exchange, with the added advantage that it is a Multilateral Trading Facility (MTF) as defined by the EU’s Markets for Financial Instruments Directive (MiFID) and operated by an EU regulated Stock Exchange.
The role of the Nomad is critical to the listing process as it is for the Nomad to determine the company’s suitability for an ECM Admission. The Nomad is responsible for the compliance with the ECM Rules on and following admission. The ECM Rules are published by the CSE and set out the rules and responsibilities that an ECM listed company must comply with.
REPORTING REQUIREMENTS
All companies that have listed securities on the ECM are required to comply with ongoing obligations. The key ones include:
  • audited accounts within 4 months following financial year end
  • 6 month interim management accounts 2 months thereafter
  • corporate matters including notification for any AGM/EGM, bonus share issues, mergers and acquisitions, changes in directors, major shareholder transactions
  • announcements with major impact on the bond price must be notified to the CSE
  •  prompt payment of dues and obligations to CSE, Nomad and professionals
 Benefits of Listing
  • Speedy listing process and competitive listing costs; timeframe for listing can be no more than 2 weeks if all material is in place
  • Possibility of easy transition to other global exchanges such as the AIM exchange in London
  • Provision of an ISIN from the CSE through which investors global wide may access information about the listed share on data platforms such as Bloomberg and Reuters
  • No requirement for daily volume
  • No maximum ownership rule, hence one beneficial owner can hold 100% control
  • No minimum market capitalization criteria, hence even if value of shares declines, the company may remain listed
  • Relatively flexible listing requirements and subsequent ECM rules thereafter
  • Listed companies on the ECM can capitalize on the tax benefits of the EU jurisdiction of Cyprus
  • Leveraging on potential investors such as pension funds whose investments may be restricted to solely listed securities
  • Ability to list various types of financial instruments that include stocks, bonds, funds amongst other securities
 Listing Requirements
Public Company:
 At least 10 shareholders
  • In the instance of a CyCO a minimum share capital of 26K(EUR) is possible but 100k(EUR) is advisable
  • 2 year audited financial statements required.
  • New companies should provide a business plan and 2 year financial projections
 Major shareholders:
Major shareholder can hold up to 99% of the shares and the rest split between at least another 9 shareholders. The remaining 9 shareholders can act as nominees to the beneficial owner.
Board of Directors:
There should be a minimum of 3 directors; one executive director and two non executive directors. Majority of directors should be tax resident in Cyprus.
Other Officers:
  • Requirement for a Nomad responsible for the listing and for ongoing compliance with the ECM Rules for Companies subsequent to the admission of the plc
  • Registered office
  • Disclosure of collaborating banks of the PLC
  • Legal advisor
 Methods for Listing
The listing of a company on the Emerging Companies Market can be achieved in two ways:
(a) By public offering: If the offering is public, greater than Euro 5 million and is addressed to over 150 persons, a Prospectus and approval from the Securities and Exchange Commission will be required.
(b) Through private placement: If addressed only to institutional investors (strategic or other) or to fewer than 150 persons and less than Euro 5 million will be raised, an Admission Document must be submitted to the CSE, with- out a requirement for approval by the Securities and Ex- change Commission.
(c) A combination of (a) and (b) above.
An issuer who is seeking to float securities on the Emerging Companies Market must submit the following documents, together with the required fee:
An application in the Form contained in the Annex as ermined by the Board.
An Admission Document.
  • A copy of a Memorandum and Articles of Association certified as authentic.
  • A copy of the decision required for the issue or placement of the securities.
  • Declarations in Forms I and II on behalf of the majority of the board of directors and including at least the chair- man’s declaration.
  • A Prospectus and approval from the Securities and Ex- change Commission, if required.
 The Admission Document must include:
An analytical background of the issuer.
  • An adequate Business Plan stating the issuer’s short- and long- term business plans.
  • Information about the Board Members and the share- holders who own the major part of the issuer’s share cap- ital.
  • Information about the issue.
  • Business risks.
  • Audited accounts (if any) for the last two years prior to the application.
  • Intended use of the capital to be raised.
 General
Transactions on the Emerging Companies Market will be conducted as on regulated markets.
  • The current trading system of the CSE will be used.
  • The provisions for guarantee Fund, maximum trading limits and Members participation in the guarantee fund shall apply.
  • The provisions for off-exchange trading shall apply.
  • The existence of a market maker is not mandatory.
Continuing obligations and financial reporting
Annual audited accounts must be signed and published within four months of the year end
  • Half-yearly reports (unaudited) must be published within two months of the period end
  • Announcement of any changes in the collaboration between the issuer and the NOMAD, accompanied with the reasons
  • In order to ensure the early notification to investors, listed companies have the obligation to announce to the CSE immediately, and if possible at least one hour before trading begins, any decision relating to the following matters:
–    Decision to pay or not to pay a dividend, the distribution of profits or the payment of interest concerning listed securities
–    Approval of financial results and accounts an how these will be published
–    In the case of bonds, any decision taken for a new issue and especially any matters associated with indemnities or collateral
–    Any decision taken concerning changes in the capital structure of the company
–    Any significant changes in the operations of the issuer
–    Any changes in the positions of chairman, member of the board of directors, senior management, the auditors or any other executive
–    Publication and submission to the CSE of the dispersion of shares in the listed entity on the last working day of the calendar year
Trading Hours
The trading hours of the Emerging Companies Market are as follows:
10:15 – 10:30 Pre-opening (RTP 10:28-10:30)
10:30 – 17:05 Continuous trading
17:05 – 17:20 Closing
During the admission process
  • company Registration
  • confirming to the CSE the appropriateness of the company for listing;
  • ensuring compliance with the ECM rules;
  • leading the drafting of the admission document; and
  • project managing the overall process leading to a listing
 Post admission
  • continue to act as NOMAD following admission, advising you on your ongoing obligations as a listed company;
  • assisting with comfort letters and related procedures;
  • assisting with meeting publishing deadlines i.e audited accounts, financial reports;
  • risk management advice; and
  • we can act as compliance officer
 How can Tornaritis Law help?
Tornaritis Law Firm LLC is a CSE approved NOMAD. We have a strong and distinct, regulatory-compliant brand which, we feel, lends weight to any prospective listing in the eyes of both the CSE ECM team and potential investors.
 Email: criton@tornaritislaw.com, Tel: +357 22456056

CYPRUS: The location of choice for Floating in the Cyprus Stock Exchange creates new opportunities for companies

Floating on the E.C.M Emerging Companies Market

Overview

CSE’s Emerging Companies Market (ECM) is similar to the AIM for the London Stock Exchange, with the added advantage that it is a Multilateral Trading Facility (MTF) as defined by the EU’s Markets for Financial Instruments Directive (MiFID) and operated by an EU regulated Stock Exchange.

The role of the Nomad is critical to the listing process as it is for the Nomad to determine the company’s suitability for an ECM Admission. The Nomad is responsible for the compliance with the ECM Rules on and following admission. The ECM Rules are published by the CSE and set out the rules and responsibilities that an ECM listed company must comply with.

REPORTING REQUIREMENTS

All companies that have listed securities on the ECM are required to comply with ongoing obligations. The key ones include:

audited accounts within 4 months following financial year end

6 month interim management accounts 2 months thereafter

corporate matters including notification for any AGM/EGM, bonus share issues, mergers and acquisitions, changes in directors, major shareholder transactions

announcements with major impact on the bond price must be notified to the CSE

prompt payment of dues and obligations to CSE, Nomad and professionals

Benefits of Listing

Speedy listing process and competitive listing costs; timeframe for listing can be no more than 2 weeks if all material is in place

Possibility of easy transition to other global exchanges such as the AIM exchange in London

Provision of an ISIN from the CSE through which investors global wide may access information about the listed share on data platforms such as Bloomberg and Reuters

No requirement for daily volume

No maximum ownership rule, hence one beneficial owner can hold 100% control

No minimum market capitalization criteria, hence even if value of shares declines, the company may remain listed

Relatively flexible listing requirements and subsequent ECM rules thereafter

Listed companies on the ECM can capitalize on the tax benefits of the EU jurisdiction of Cyprus

Leveraging on potential investors such as pension funds whose investments may be restricted to solely listed securities

Ability to list various types of financial instruments that include stocks, bonds, funds amongst other securities

 

Listing Requirements

Public Company:

At least 10 shareholders

In the instance of a CyCO a minimum share capital of 26K(EUR) is possible but 100k(EUR) is advisable

2 year audited financial statements required.

New companies should provide a business plan and 2 year financial projections

 

Major shareholders:

Major shareholder can hold up to 99% of the shares and the rest split between at least another 9 shareholders. The remaining 9 shareholders can act as nominees to the beneficial owner.

 

Board of Directors:

There should be a minimum of 3 directors; one executive director and two non executive directors. Majority of directors should be tax resident in Cyprus.

 

Other Officers:

Requirement for a Nomad responsible for the listing and for ongoing compliance with the ECM Rules for Companies subsequent to the admission of the plc

Registered office

Disclosure of collaborating banks of the PLC

Legal advisor

 

Methods for Listing

The listing of a company on the Emerging Companies Market can be achieved in two ways:

(a) By public offering: If the offering is public, greater than Euro 5 million and is addressed to over 150 persons, a Prospectus and approval from the Securities and Exchange Commission will be required.

(b) Through private placement: If addressed only to institutional investors (strategic or other) or to fewer than 150 persons and less than Euro 5 million will be raised, an Admission Document must be submitted to the CSE, with- out a requirement for approval by the Securities and Ex- change Commission.

(c) A combination of (a) and (b) above.

An issuer who is seeking to float securities on the Emerging Companies Market must submit the following documents, together with the required fee:

An application in the Form contained in the Annex as ermined by the Board.

An Admission Document.

A copy of a Memorandum and Articles of Association certified as authentic.

A copy of the decision required for the issue or placement of the securities.

Declarations in Forms I and II on behalf of the majority of the board of directors and including at least the chair- man’s declaration.

A Prospectus and approval from the Securities and Ex- change Commission, if required.

The Admission Document must include:

An analytical background of the issuer.

An adequate Business Plan stating the issuer’s short- and long- term business plans.

Information about the Board Members and the share- holders who own the major part of the issuer’s share cap- ital.

Information about the issue.

Business risks.

Audited accounts (if any) for the last two years prior to the application.

Intended use of the capital to be raised.

General

Transactions on the Emerging Companies Market will be conducted as on regulated markets.

The current trading system of the CSE will be used.

The provisions for guarantee Fund, maximum trading limits and Members participation in the guarantee fund shall apply.

The provisions for off-exchange trading shall apply.

The existence of a market maker is not mandatory.

Continuing obligations and financial reporting

Annual audited accounts must be signed and published within four months of the year end

Half-yearly reports (unaudited) must be published within two months of the period end

Announcement of any changes in the collaboration between the issuer and the NOMAD, accompanied with the reasons

In order to ensure the early notification to investors, listed companies have the obligation to announce to the CSE immediately, and if possible at least one hour before trading begins, any decision relating to the following matters:

 

–    Decision to pay or not to pay a dividend, the distribution of profits or the payment of interest concerning listed securities

–    Approval of financial results and accounts an how these will be published

–    In the case of bonds, any decision taken for a new issue and especially any matters associated with indemnities or collateral

–    Any decision taken concerning changes in the capital structure of the company

–    Any significant changes in the operations of the issuer

–    Any changes in the positions of chairman, member of the board of directors, senior management, the auditors or any other executive

–    Publication and submission to the CSE of the dispersion of shares in the listed entity on the last working day of the calendar year

 

Trading Hours

The trading hours of the Emerging Companies Market are as follows:

10:15 – 10:30 Pre-opening (RTP 10:28-10:30)

10:30 – 17:05 Continuous trading

17:05 – 17:20 Closing

During the admission process

company Registration

confirming to the CSE the appropriateness of the company for listing;

ensuring compliance with the ECM rules;

leading the drafting of the admission document; and

project managing the overall process leading to a listing

Post admission

continue to act as NOMAD following admission, advising you on your ongoing obligations as a listed company;

assisting with comfort letters and related procedures;

assisting with meeting publishing deadlines i.e audited accounts, financial reports;

risk management advice; and

we can act as compliance officer

How can Tornaritis Law help?

Tornaritis Law Firm LLC is a CSE approved NOMAD. We have a strong and distinct, regulatory-compliant brand which, we feel, lends weight to any prospective listing in the eyes of both the CSE ECM team and potential investors.

Email: criton@tornaritislaw.com, Tel: +357 22456056

Contact us

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