The Cayman Islands Stock Exchange (CSX) has steadily risen as a specialist exchange since its launch in 1997, providing an efficient and effective mechanism for qualified companies to raise capital, attract new investors and provide superior benefits to existing owners. In order to remain competitive and actively engaged with the market, the CSX has now made the investment necessary to take it to the next level as an easily-accessible global equities exchange.
Situated in one of the world’s leading jurisdictions for investment funds and structured finance, the CSX has successfully developed to satisfy the market requirement of listing these products. The exchange has listed over 3,500 securities since launch and now has a market value of over US$165 billion.
Built upon a structure of stability and integrity, the CSX is well-recognised and highly regarded for its strong compliance culture, market-friendly and tailored listing rules and our strict adherence to quality standards. The CSX is recognised by the HM Revenue & Customs; is the only offshore exchange to be a member of the Inter Market Surveillance Group (a group of over 30 exchanges worldwide); and is an affiliate member of IOSCO.
The benefits of listing on an exchange are numerous and work to reinforce the security and sustainability of a company or fund: fund managers, promoters and investors will gain from independent regulatory oversight and scrutiny of fund offerings – some institutional investors insist on a listing; there will be a single source of regulatory news and NAV pricing information on the exchange’s website; and a listing may make a fund eligible for investment by other funds. Arrangers of structured debt and other fixed income offerings can use a CSX listing with its standardised IOSCO-based offering documentation to appeal to a wider range of investors and a listing may even enable more favourable pricing with narrower spreads.
The CSX has flourished over the last 15 years with the influx of this business and has gained a reputation as a specialist in listing bespoke investment funds and structured credit deals as well as becoming a recognised hub for listing insurance linked securities, or ‘cat bonds’. But, the market has changed somewhat and we have had increasing demand from international companies faced with sluggish capital markets and a paucity of credit in their home jurisdictions looking at a CSX listing as an alternative way to finance their operations.
In response to this demand, it was deemed time to expand the horizons of the exchange and in March of this year we announced the launch of ‘XCAY’, a new equity trading market built upon XETRA, the Deutsche Boerse’s flagship trading platform which has been adopted by 14 exchanges from Frankfurt to Shanghai.
The CSX chose XETRA above its competitors because of the potential for easily accessing a wide network of existing XETRA market users and liquidity that could otherwise take years to develop. Based on industry-driven international messaging standard FIX Protocol (Financial Information Exchange Protocol), XETRA FIX gateway offers simple and flexible access to more than 400 brokers and banks worldwide who are already linked into and trading on one of the XETRA network exchanges. Any of these users can join the CSX market through a simple passporting arrangement and once registered as a CSX broker, can easily trade CSX-listed shares on the same screen.
XCAY operates a zero trading fee model (our costs being covered by a flat and very competitive annual listing fee) and a ‘mid-Atlantic’ trading day based around core hours of 12-5:30pm GMT with opening and closing auctions – which is intended to allow companies easy access to both American and European markets. The CSX’s post-trade architecture has also been upgraded to allow trades to be cleared through Clearstream in Luxembourg, or any other internationally recognised system such as DTC.
As a specialist exchange, we have worked to develop new listing rules that are specifically geared to various target industries, and provide listing companies the comfort of mind that we (and our listing agents) understand their businesses and their specific needs. We now have a full suite of rules that, in addition to standard debt and fund listings, cater to mineral companies, technology companies, start-ups and shipping companies. In keeping with our reputation as a specialist in alternative investments there are also new provisions for listing ‘specialist companies’ – where investment is restricted to sophisticated investors. In return for enhanced risk disclosure, specialist companies can list with a shortened financial track record and without the requirement for a broadly held, liquid shareholder base, which may not be necessary for institutional deals.
We believe that the CSX is well-positioned in a crowded marketplace to accelerate its lead as a specialist stock exchange and will continue to provide innovative and tailored solutions to its clients, seamlessly connecting the companies looking to raise capital with the sophisticated investors looking for returns in a secure, regulated environment.