The Cyprus Stock Exchange (CSE) was established with the powers vested by the Cyprus Securities and Stock Exchange Law 14(I)/1993 which provides for the development of the securities market in Cyprus, and for the establishment and operation of the Cyprus Stock Exchange. The CSE commenced its operations on the 29th of March 1996 and allows companies to list their securities on the Regulated Market, and the Emerging Companies Market (ECM), a new unregulated market which was launched in 2009 and does not come under the mandatory provisions for regulated markets.
There are certain general listing requirements that must be fulfilled for all markets.
First of all, the issuer must be an approved investment firm, or allowed to offer investment services in the Republic of Cyprus, according to the Investment Services and Activities and Regulated Markets Law 144(I)-2007.
The company must also have the appropriate technical infrastructure for the execution, clearing and settlement of stock exchange transactions, according to the stock exchange legislation. The Council of the CSE may give an exemption from this requirement to an investment firm that operates in any other EU Member State and is a Member of a Stock Exchange in that State.
A further prerequisite is that the company has a stockbroker representative as well as a clearing and settlement officer for stock exchange transactions, approved by the CSE.
Finally, if the issuer wants to become a General Clearing Member (GCM), they must deposit to the CSE a special bank guarantee for the amount of €50.000, plus a deposit of €100.000 at the settlement bank used by the CSE. If the issuer wants to become a Direct Clearing Member (DCM), they should only maintain a deposit of €100.000 at the settlement bank used by the CSE.
The regulated market is divided into two sub-markets, namely the Main Market and the Alternative Market.
The Main Market is for issuers of big capitalization, whereas the Alternative Market is for issuers with medium and small capitalization.
The listing requirements for the Main Market are the following:
The Market Capitalization must be at least €3.500.000.
The equity capital for one of the two years prior to listing must be exceeding €3.000.000.
The issuer must show profit after tax according to the audited accounts for at least two of the last three years.
The issuer has prepared audited accounts and operated normally at least three years prior to its listing with a positive net worth for the year prior to its listing.
The issuer fully adopts the Corporate Governance Code of the Cyprus Stock Exchange.
The company must have an accessible web page on the internet.
The company must employ a Compliance Officer for stock exchange issues on a permanent basis.
The company must have a well-organized Accounts Department, headed by a Certified Accountant, member of the Institution of Certified Public Accountants of Cyprus or an equivalent Professional Body.
The listing requirements for the Alternative Market are less stringent:
The market capitalization must not be less than €1.000.000.
The issuer has operated normally and had audited accounts for the two years prior to the listing.
The company employs a Compliance Officer for stock exchange issues on a permanent basis.
Unregulated market – Emerging Companies Market:
This market was specifically designed for the needs of small and emerging companies as it provides easy access to the secondary market with lower costs and less obligations. It also prepares a future transfer to the regulated market, through the gradual increase of the dispersion and velocity of shares. For these reasons, the listing requirements for the ECM are even more lenient:
The company must prepare audited accounts, have operated regularly and had relevant activities for at least two financial years prior to listing unless it is an emerging company which satisfies the Council that it provides satisfactory information so that the investors can evaluate the value of its titles. Moreover, the company must obtain and maintain the services of a Nominated Advisor.