The key to a successfully regulated exchange is combining global standards with a proportionate approach based on business risk, says Fiona Le Poidevin, CEO of the Channel Islands Securities Exchange.
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The Channel Islands Securities Exchange (CISE) provides a regulated marketplace for international companies to raise money from investors around the globe.
The fact that we offer a regulated listing facility distinguishes us from some of our competitors. While there may be a perception that this would put us at a disadvantage, in fact many issuers and investors like the ‘kite-mark’ and comfort it provides.
The CISE is an affiliate member of the International Organisation of Securities Commissions (IOSCO); only national supervisory bodies can be full members.
Adopting its global standards of issuer regulation provides issuers and investors with consistency of approach and therefore, familiarity. It also means that securities can more easily migrate onto or dual list with another exchange, for example as a trading company grows.
The key to a successfully regulated exchange though is providing a balance between adopting global standards and ensuring that that they are applied in a manner which is proportionate to the risks associated with the securities being listed.
For example, securities which are clearly marketed for only sophisticated investors may be able to benefit from fewer disclosures or provisions than those which are retail products (and therefore require a higher level of investor protection).
On the other hand, securities related to industries such as gambling may be perceived as higher risk but they are not precluded from listing on the exchange. This equally applies to business from jurisdictions which might be deemed as higher risk. It is not necessarily precluded from listing and in fact, will be welcomed if the CISE’s market authority is comfortable with the security and its related structure.
It is also important that the regulation is appropriate to the product line. For example, we are currently considering how our rules for trading companies might be adapted to better reflect both the risks and commercial reality for SMEs.
Like the wider financial services industry in the Channel Islands, the CISE adopts global standards of regulation and ensures that it is applied in a pragmatic and proportionate manner so that we continue to attract good quality business.
About the Author
Fiona Le Poidevin Fiona Le Poidevin is the CEO of The International Stock Exchange Group. She is a Chartered Accountant and a Chartered Director.
Her role includes strategy formulation and business development, exploring opportunities to grow the £300bn+ of securities already listed on the CISE through the introduction of new products and service offerings.
Prior to her appointment in January 2015, Fiona was chief executive of Guernsey Finance, the promotional body for Guernsey’s finance industry. Previously a senior tax manager with a Big 4 accountancy firm, she has more than 18 years’ experience working in financial services in both London and the Channel Islands.