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By Shavasb Bohdjalian, Certified Investment Advisor and CEO of Eurivex
Private corporations from any jurisdiction are now in a position to issue their corporate bonds and list the bonds on the MTF Market of the Vienna Stock Exchange under simplified listing rules and at very reasonable fees.
The Multilateral Trading Facilities (MTF) are a form of “lite exchange” because they provide similar or competing trading services, such as rulebooks and market surveillance departments, but operate through simplified procedures and at very competitive fees than what it would cost to list financial instruments (shares, bonds, funds) on the traditional stock market segments.
The MTF Market of Vienna Stock Exchange is operated by the regulated Vienna Stock Exchange.
In Vienna they also refer to the MTF Market as the Third Market but trading in bonds goes through the same clearing and settlement structure.
MAIN ADVANTAGES
The biggest advantages for listing in MTF Markets are:
• There is no need to submit prospectus. Listing is done through simplified method.
• A bond listing on an EU stock exchange allows the Issuer regulatory approval to sell the bonds and raise money from investors across the EU28.
• Issuer secures Austrian (AT) International Securities Identification Number (ISIN).
• Listing in major currencies allowed.
• Issuer is under no obligation to provide liquidity.
• Startups without prior history can list their financial instruments.
• Listing is secured in 2 weeks.
• Clearing and custody via OeKB – the Austrian CSD Depository with access to Clearstream/Euroclear.
• Listing costs are significantly lower.
• The level of reporting after listing is lite.
• Trading in the financial instruments is done via brokers on Xetra system.
TYPES OF BONDS
The Vienna Stock Exchange allows for most types of bond listings including:
– Traditional bonds with fixed coupon
– Floating rates
– Zero coupon bonds
– Performance linked bonds*, whose value is tied to the performance of the underlying asset.
*Performance Linked Bonds are increasingly becoming attractive since they spread the risk of performance on the investors.
Such Performance Linked Bonds may also be used for trading in capital markets in derivative products such as trading in shares, bonds and forex. When the trading performance is positive, the NAV will increase, whereas if there are trading losses, the NAV will decline.
AT-ISIN
The Vienna Stock Exchange prefers for Issuers to conduct their private placement of bonds and then list on the Exchange. An Issuer can apply for a larger amount of listing, but list the bonds in tranches of minimum EUR 200.000 lots over several years.
Once the listing procedures have been approved, Eurivex will secure an Austrian AT-ISIN for the bonds.
CLEARING & SETTLEMENT, TRADING
The Issuer also needs to furnish evidence that it meets the requirements for including in trading pursuant to Exchange rules, but Issuer has free choice of clearing system while its Global certificates have to be deposited with Euroclear, Clearstream Luxembourg, the Austrian central custodian OeKB or other custodians having a clearing link with OeKB.
Eurivex, a regulated EU investment firm, which has acted as Listing Agent for more than 15 bond listings on the MTF Market of the Vienna Stock Exchange, is also an approved Paying Agent with its clearing account via OeKB and can deliver listed bonds to customer custodian banks who maintain accounts with Clearstream Luxembourg Bank or Euroclear.
Bonds are traded on Xetra trading system, but Issuer is under no obligation to provide liquidity.
Eurivex Ltd is a Cyprus Investment Firm, regulated by CySEC, license #114/10 offering forex solutions and portfolio management services. Eurivex is also approved by the Cyprus Stock Exchange to act as Nominated Advisor (Nomad) for listings on the Emerging Companies Market and also authorized to act as Listing and Paying Agent for listings on the Vienna Stock Exchange. The views expressed above are personal and do not bind the company and are subject to change without notice. [email protected]
