Listing High Yield Bonds
The International Stock Exchange is a popular listing venue for high yield bonds as issuers are attracted to the robust and proportionate rules of our recognised exchange.
In the last few years an increasing number of issuers of High Yield Bonds (HYBs) have chosen to list on TISE. Issuers have included a mix of public and private European and US headquartered companies, including some of the most internationally recognised brands and/or global leaders in their industries. The listings have included both new issuances and migrations from EU exchanges as issuers and their advisers are attracted by our robust and proportionate rules for listing HYBs.
For example, we have robust market abuse rules: there is an obligation on issuers to disclose information which might reasonably be expected to materially affect market activity in, and the price of, its securities and to avoid the establishment of a false market; our Members are bound by a Code of Conduct which includes rules around forbidden market practices, such as the creation of false markets, false trading, price fixing, false or misleading information and insider dealing; and we place obligations on the brokers trading securities on the Exchange, regarding quotations, transaction reporting, record keeping, price stabilisation and short selling.
"Our rules are applied proportionately to address the risks of different products and different investors..."
However, we also ensure that our rules are applied proportionately to address the risks of different products and different investors. For example, our Model Code for Securities Transactions by Persons Discharging Managerial Responsibilities (PDMRs) applies to the equities of trading companies and investment vehicles but does not apply to debt securities. We have an admissions and continuing obligations regime which is proportionate and reflects the expertise of the investor base, for example we take a pragmatic approach to disclosure requirements.
In addition, we have specific guidance for the listing of HYBs which will be familiar to those who operate in the market. For example, we may not require standalone guarantor accounts for each guarantor, if they are all part of the same group, and group consolidated accounts may be acceptable. We are also aware that many HYB issuers have certain requirements in terms of the time to process listing applications and we believe that, as long as they and the Listing Agent work in conjunction with our responsive listings team, then we will be able to meet their expectations.
This is a regime which has been maintained since the introduction of, and notably contrasts with, the EU’s Market Abuse Regulation (MAR).
MAR came into effect from 3 July 2016. It has put in place a raft of obligations in relation to inside information, market soundings (gauging investors' interest of a potential transaction prior to its announcement), insider dealing and market abuse for securities admitted to trading on a facility in the EU.
These can be not only burdensome and costly for issuers but because they apply equally to all types of securities, they are disproportionately onerous for some products such HYBs which are typically held long term by sophisticated investors.
As such, issuers who would have previously listed products on EU markets are now increasingly seeking out non-EU alternatives, such as TISE. We are based in the European time zone but outside of the EU and therefore MAR does not apply to securities listed on our Exchange. TISE provides a fully regulated marketplace which offers continuity through our robust and proportionate rules.
It is this approach, combined with international approvals, such as being deemed a Recognised Stock Exchange by the UK tax authority, Her Majesty’s Revenue & Customs (HMRC), for the Quoted Eurobond Exemption (QEE) which means that over the years we have developed expertise in listing debt. Today there are more than 2,000 debt securities listed on our Exchange.
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