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Cayman Islands Exchange Highlights Benefits Of Local Listing

by Mike Godfrey, Lowtax.net, Washington
07 June, 2016

The Cayman Islands Stock Exchange (CSX) has published a brief guide highlighting the benefits of locally incorporated investment funds listing on the Exchange.

In addition to the reduced administrative requirements that come with being incorporated and listed in the same jurisdiction, the CSX points to its competitive pricing; international standards of regulation; and experience providing a specialized listing and trading facility for investment funds, specialist debt securities, and Eurobonds.

The CSX has used the Deutsche Börse XETRA® trading platform since March 25, 2016, and provides a secondary listing facility and an offshore trading venue for securities listed and traded on other recognized exchanges, as well as offering domestic companies the ability to list and trade locally.

Unlike some jurisdictions, there are no exchange controls in the Cayman Islands and no minimum subscription level for Cayman-domiciled funds. There are also no restrictions on investment policy and principal investment objectives, and investment policies can be changed provided that the mechanism is disclosed in the listing document.

The CSX does not insist on any prescribed degree of investment diversification (e.g. it can list currency or commodity funds), and there is no requirement for majority board independence. in addition, listed entities are not required to report using International Accounting Standards/International Financial Reporting Standards, provided that an appropriate accounting standard is used.

As the CSX operates outside the European Union and the USA, the regulatory burden is less onerous than listing on other major stock exchanges.

The CSX became the first offshore stock exchange to be granted approved organization status by the London Stock Exchange (LSE) and securities listed on the CSX are eligible for trading in the LSE's international equity market and for quotation on the SEAQ (Stock Exchange Automatic Quotation) international trading system.

The CSX is a "recognized stock exchange" under the United Kingdom's tax law. Consequently, qualifying debt securities listed on the CSX are now eligible for the Quoted Eurobond Exemption. This allows an issuer liable to pay UK tax to make payments of interest on the listed securities without deduction for tax. There are also United Kingdom capital gains and inheritance tax benefits to investing in shares listed on a recognized stock exchange such as the CSX.

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