Gibraltar, a member of the European Union (EU), has emerged as a popular jurisdiction for investment funds. The latest addition to its services is the Gibraltar Stock Exchange (GSX) which opened in November 2014, initially as an exchange for open-ended funds.
So why would a Hong Kong based fund seek to list its shares on the GSX? The short answer is simple - visibility. A GSX listing can provide EU visibility without the fund falling within the EU legal, regulatory or taxation environment. As fund managers worldwide know, access to the European market has been complicated by the introduction of recent laws, however it is a myth to suggest that access to the EU market is now impossible. One means of gaining some traction in the EU is a listing on the GSX. For a non-EU fund a GSX listing brings:
European Union Visibility and Assists Distribution
A listing on an EU stock exchange gives a fund visibility to the EU market. It can also be a step in establishing structures to allow for the distribution of a fund within the EU.
An EU Listing Without Imposition of EU Laws and Taxes
Funds incorporated outside the EU often want visibility to the EU market, but do not want to be subject to EU laws or taxation.
No Modifications To Fund Required
(e.g., investment powers or borrowing restrictions)GSX operates on the basis of disclosure, not prescribed rules as to what a fund may or may not do.
Increased Fund Marketability
Many institutional investors can only invest in listed securities.
Increased Investor Confidence
A listing status gives credibility and increases investor confidence in a fund.
Increased Investor Transparency
Many investors seek increased transparency. GSX’s website displays regular operational data, such as net asset values, so enhancing transparency.
Quickest and Most Competitive EU Listing
Who can list on the GSX? There are no restrictions. Start-up funds as well as established funds are welcome, and a listing applicant can be incorporated in any jurisdiction approved by the GSX (most are approved). The main qualification is that the listing applicant must satisfy the GSX that its directors, and any investment manager, have sufficient and satisfactory experience.