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The Success Of CISX

The Channel Islands Stock Exchange (CISX) commenced operations on 27 October, 1998 with 23 founder members. Its aim is to provide trading and listing of investment funds, debt instruments and shares in companies and to bring the expertise available in the Channel Islands to the expanding network of international businesses requiring expert offshore financial services in the European time-zone.

Ownership of the CISX lies in the hands of its listing members, who have to be established in the Channel Islands. Management and control are vested in a board of directors who are elected. Based in St Peter Port, Guernsey, the CISX provides a listing facility and screen-based trading.

Although the CISX is based in Guernsey, it is used both by Jersey and Guernsey traders, brokerages and companies.Trading members do not have to be established in the Channel Islands, but must be licensed, regulated or supervised by a regulatory body in a jurisdiction recognised by the CISX.

The CISX's screen-based trading platform is based on Reuter's Triarch network installed at the Exchange's St Peter Port offices. Reuters has been involved with the financial markets in the Channel Islands many years, with offices in Guernsey and Jersey since 1984. Reuters was chosen by the CISX because it offers a first class system for the delivery and management of the Exchange's market data. There is also the opportunity to access the considerable communications network and range of information services available from Reuters.

Trading in the shares of local companies may be settled via Crest or Crest Residual. International debt issues, and other eligible issues, may be settled through either Cedel Bank or EuroClear unless otherwise agreed, by the parties to the transaction, at the time of trade.

Since commencing operations, the CISX has grown rapidly, reaching a total of 3,500 listings in January 2010. The exchange prides itself on a personalised approach and fast track processing of listing applications within a highly regulated and innovative marketplace.

In 2009, the exchange experienced trading volumes in excess of 83 million trades alongside the admission of 443 securities to the Official List. Five new members also joined the Exchange during the year. Business continued to be strong in niche markets, in particular in alternative investment funds and specialist debt and there was continuing interest in listing structured funds.

Tamara Menteshvili, Chief Executive of the CISX, said: “2009 was an exciting year for the Exchange, winning two Guernsey Enterprise Awards and also hosting the inaugural International Business Summit where the breadth and quality of the speakers and delegates underscored the global reach of the Exchange.”

“To meet another milestone and list 500 securities in just over a year is a tremendous achievement, particularly during the challenging economic environment. The benefits of listing on the CISX continue to contribute to the Exchange’s growth, as companies recognise the high standards of service, choice and value for money we are able to offer.”

On May 27, 2009, Max Property Group Plc was admitted to the Daily Official List of the Channel Islands Stock Exchange. The listing was on a primary basis and the issue of shares constituted the largest Initial Public Offering (IPO) in Europe to date that year.

Max Property Group, a Jersey-incorporated closed ended property investment company, was also the first IPO to have listed in the UK market since December 2008.

Max Property Group is managed externally by Prestbury Investments led by Nick Leslau and Mike Brown. The company raised GBP220m (before the expenses of the issue) and it had the backing of investors, Och-Ziff, which had committed to invest GBP35m at offer price. The management team, its partners and affiliates, had also committed to invest GBP25m.

Aubrey Adams, proposed Chairman of Max Property Group Plc, commented: “We are delighted by the level of interest in Max Property Group Plc and the support that we have received from institutional investors. The Board believes that difficult conditions in the UK property market present a compelling investment opportunity for those with in-depth sector experience. The proceeds from the offering should give us sufficient funds to take advantage of this opportunity for the benefit of shareholders.”

CISX chief executive, Tamara Menteshvili commented: “We are naturally delighted that the issuer has selected the CISX as their recognised stock exchange. During these difficult trading conditions, it is encouraging for the markets generally to see such a significant listing in the UK property market and the CISX is able to facilitate their strategic aims through the admission to the CISX Daily Official List.”

In September, 2002, the US Securities and Exchange Commission's awarded the Channel Islands Stock Exchange (CISX) designated offshore securities market status. In December, 2003, the CISX gained approval by the UK Financial Services Authority as a Designated Investment Exchange.

The success of the exchange, and the substantial growth this has meant for firms using it, has been due in large part to its promotion of new product areas, including eurobonds, floating property funds, structured debt, warrants, specialist debt securities, open and closed-ended investment funds, special purpose vehicles and insurance related instruments.

CISX is a recognised stock exchange for HM Revenue & Customs purposes and as such a REIT (Real Estate Investment Trust) listed on CISX meets the requirement for stock exchange listing. Eligible REITs structured as Jersey companies can gain approval as listed investment funds in just three days, and can avoid the need for obligatory 3-year audited accounts. If managed and controlled from the UK, as is required under UK REIT legislation, Jersey law permits CISX-listed REITs to be UK-resident, and the use of a Jersey protected cell company achieves the required isolation of REIT assets from its liabilities. A CISX-listed and Jersey-registered REIT will not be subject to stamp duty on share transfers.

Jersey Industry Insight

E-Commerce, Opportunities in the Island of Jersey
by by Grant Twine, Director, Basel eBusiness Limited

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