articles | 13 December 2019

Listing Funds on the Cyprus Stock Exchange (CSE)

The legal framework of the Cyprus Stock Exchange (CSE) regarding Collective Investments Schemes provides the possibility of listing (with or without trading) both units or shares of Undertakings for Collective Investment in Transferable Securities (UCITS) and of Alternative Investment Funds (AIFs).

Competitive EU Listing

A Cyprus Stock Exchange (CSE) listing provides a number of advantages for fund managers and investors. The Exchange is an EU-regulated and recognised Exchange, which provides a better fund profile and credibility to investors. It has fast and simple listing procedures with minimum bureaucracy, advanced technology and infrastructure, as well as flexibility and effectiveness at low cost. The CSE has a competitive pricing policy for both market participants and investors, with the potential to increase a fund’s investor base. Funds that obtain a listing can be more effectively marketed to investors and can therefore be considered as an eligible investment opportunity for particular institutional investors, overcoming specific restrictions requiring investments securities listed on a recognised exchange.

Investment Visibility

A CSE listing provides visibility and transparency to investors with the prices of listed funds posted on the CSE’s website and reported to the market through major data vendors. Price mechanism is provided, either through Net Asset Value (NAV) postings or market prices, if traded. This parameter is important for fund managers who require a publicly quoted Exchange price for their investments. The Cyprus Stock Exchange has listed 17 non-tradable Collective Investment Funds – more specifically, two single schemes UCITS funds and 15 sub-funds of one UCITS umbrella scheme. Additionally, two AIFs have been listed on the non-tradable Collective Investment Schemes Market, one single scheme and two classes of shares of a sub-fund(Umbrella Scheme).

Future Developments

The CSE is continuously diversifying its activities and services and is committed to enhancing the competitiveness and accessibility of Cyprus to foreign investors. The CSE would like to establish itself as an integral part of the country’s growth strategy, supporting efforts to strengthen Cyprus’ role as both a regional business hub and a financial centre.

 

Who Can List

On the Collective Investment Schemes (CIS) Market of the Cyprus Stock Exchange (CSE), the following CIS may be listed after approval by the CSE Council:

Collective Investment Schemes in Transferable Securities: Common Fund or Variable Capital Investment Companies, which have obtained an operating license by CySEC or have the right for distribution of units or shares to the public in Cyprus.

Alternative Investment Funds: Common Fund or Variable or Fixed Capital Investment Companies or Limited Partnerships, which have obtained an operating license by CySEC or have the right for distribution of units or shares to the public in Cyprus.

RAIFs: Registered Alternative Investment Funds can also be listed on the Cyprus Stock Exchange.

 

Regulated and ECM Markets

The CSE operates two markets, the Regulated Market and the Emerging Companies Market (ECM), which have sub-markets. Among these sub-markets there is a separate market for Collective Investment Schemes under the Regulated Market, with a separate market under the ECM expected to be launched in the future.

Collective Investment Schemes may be listed on:

Non-Tradable Collective Investment Schemes Market where there is no trading.

The listing without trading involves mainly the announcement of the prices of Collective Investment Schemes (CIS). For the listing of CIS on this Market, specific listing requirements should be fulfilled (Paragraph 3.12 of RAA 379/2014 – as amended). The listing of CIS on this Market offers transparency to the investors through the relevant announcements (NAV and others) and prestige to the issuer since the fund is listed on a recognised and regulated stock exchange.

 

Tradable Collective Investment Schemes Market.

In addition to the benefits presented above, through the listing on this Market, prices of buy and sell orders are quoted on the trading system. One form of Tradable Collective Investment Funds are the Exchange Traded Funds (ETFs) which:

  • are listed for trading on the Exchanges
  • can be bought and sold in the open market of the stock exchange during trading hours like shares
  • most ETFs track an index such as stock or bond index
If listing is not a desirable option for a fund, alternatively funds’ prices may be quoted on CSE’s web site without any obligation for listing.

 

New CSE Service: Keeping of Registries of Non-Tradable Collective Investment Schemes

The Cyprus Stock Exchange has recently published a regulatory framework regarding the provision of a new service, the undertaking and keeping by the CSE of the registries of unitholders of Alternative Investment Funds (AIFs) and Undertakings for Collective Investment in Transferable Securities (UCITS), whose units are not traded on a stock exchange market. More specifically, following an application by AIF or UCITS Managers, the undertaking and keeping of AIF and UCITS Registries by the CSE is possible through the CSE Central Securities Depository/Registry (CSD). This service provides managers efficient and secure online services at a competitive cost. With the undertaking of a registry, the disposal, redemption or settlement, transfer, pledge, change of information or other actions regarding the units or their holders are performed at the CSD. The Cyprus Stock Exchange has already accepted the keeping of the registries of two classes of shares of an AIF.

 

Issuer Requirements

Non-Tradable Collective Investment Scheme Market

An Issuer who is interested to list for the first time its securities on the Non-Tradable Collective Investment Scheme Market, in addition to any other requirement of the Law and the general listing requirements, as far as they are applicable, must satisfy the Council that the Issuer also responds to the following special requirements:

  • has an establishment and an operation license from the competent authorities of the country of origin
  • the assets of the Mutual Fund or the Variable Capital Investment Company must be at least €200,000. The Council may, by a decision, in the case of an index-replicating Collective Investment Scheme to require a larger minimum amount of assets, depending on the index
  • in regard to Collective Investment Schemes, the beneficiary-index provider should grant to the ETF issuer a lawful user license of the index at the name of the ETF
 

Tradable Collective Investment Schemes Market

An Issuer who is interested to list for the first time its securities on the Tradable Collective Investment Schemes Market, in addition to any other requirement of the Law and the general listing requirements, as far as they are applicable, must satisfy the Council that the issuer also responds to the following special requirements:

  • the Mutual Fund and the ETF Issuer have an establishment and an operation license from the competent authorities of the country of origin
  • the assets of the ETF must be at least €200,000. The Council may, by a decision, in the case of an index-replicating ETF to require a larger minimum amount of assets, depending on the index
  • the ETF Issuer should have appointed at least one Market Maker and ensure its existence during the listing and trading of the units
  • the ETF is entitled to dispose its units to investors in Cyprus in accordance with the relevant legislation
  • assign the keeping of the Units’ Registry or Shareholders’ Registry as the case may be, to the Central Depository Registry
  • the beneficiary-index provider should grant to the ETF issuer a lawful user license of the index at the name of the ETF
 

 

Listing Fees

  • Tradable Collective Investment Schemes: €2,000
  • Non-Tradable Collective Investment Schemes: €1,000
  • Collective Investment Schemes with more than one class:
  • First class: €1,000
  • Additional class: €200
  • Annual subscription fee (single funds): €1,000
  • Annual subscription fee (umbrella funds): €1,000 + €400 per class or sub-fund
  • Annual subscription fee (only sub-fund): €500 per sub-fund
 

 

Key Benefits of Listing on the CSE

  • An EU-regulated and recognised exchange
  • An improved fund profile and credibility to investors
  • Fast and simple listing procedures with minimum bureaucracy
  • Competitive pricing policy for investors and market participants
  • Potential to increase investor base
  • A high level of visibility and transparency to investors
  • A price mechanism either through NAV postings, or market prices if traded for fund managers that require a publicly quoted Exchange price for their investments
 

 

Cooperation Partners
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  • Logo for Ministry of Energy, Commerce, Industry and Tourism
  • Logo for Cyprus International Businesses Association
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