Listing Rules

- Additional Rules Derivatives

- Additional Rules Bonds

- Additional Rules Exchange Traded Products

LR4 Duties of the Listing Committee

The Listing Committee must -

a) Ensure consistent and fair application of the Listing Rules to all issuers;

b) Ensure the effective monitoring of ongoing compliance of listed issuers with the Listing Rules and applicable regulations;

c) Ensure that high standards of disclosure and transparency are maintained in the market;

d) Ensure complaints and disputes related to listing matters are addressed promptly and fairly;

e) Review and update the Listing Rules periodically to reflect changes in laws, regulations, and market practices or otherwise where opportunities for improvement are identified;

f) Liaise with regulatory authorities to ensure coordination and compliance with overarching regulatory frameworks;

g) Maintain confidentiality of information received in the course of its duties, except where disclosure is permitted by any provision of these Listing Rules or otherwise required according to applicable law; and

h) Maintain the official list of securities.

LR5 Directives

The Listing Committee may issue Directives governing the details of how the Listing Rules and Additional Rules are to be applied.

LR6 Circulars and Regulatory Notices

a) The Listing Committee may explain its practices or provisions of the Listing Rules by means of Circulars.

b) The entry into force of new provisions or amendments thereto shall be announced in the form of Regulatory Notices.

LR7 Exemptions

a) General Authority

The Listing Committee may, at its sole discretion, grant exemptions from, or modifications to, the requirements set out in these Listing Rules, provided that such exemptions or modifications:

i. Are consistent with the objectives and principles of these Listing Rules; ii. Do not compromise the integrity, transparency, or fairness of the market; and iii. Are deemed necessary or appropriate in the circumstances to facilitate the listing or continued listing of securities.

b) Application for Exemptions or Modifications

An applicant or listed issuer seeking an exemption or modification under this clause must submit a written request to the Listing Committee, outlining:

i. The specific provisions from which an exemption or modification is sought; ii. The reasons and justification for the request; iii. Supporting documentation, as required by the Listing Committee.

c) Conditions of Exemptions or Modifications

Any exemption or modification granted by the Listing Committee may be subject to conditions or additional requirements, which must be adhered to by the applicant or listed issuer.

d) Publication and Disclosure

The Listing Committee reserves the right to disclose any exemptions or modifications granted, including the rationale and any conditions imposed, unless such disclosure is deemed contrary to the public interest or the interests of the market.

e) Non-Precedential Nature

The granting of an exemption or modification shall not constitute a precedent for future applications, and each application will be considered on its own merits.

II. LISTING

A. Listing Requirements

LR8 Principle

a) The applicant must meet and provide evidence that the following requirements are met with regard to the issuer and its securities.

b) When in the interests of the public, the Listing Committee may reject a listing application even when the listing requirements have been fulfilled.

1. Issuer Requirements

LR9 Incorporation and Valid Existence

The issuer must be duly organized, validly existing and in good standing under the laws of each jurisdiction in which the issuer is organized or does business.

LR10 Duration

a) The issuer must have been in existence for at least three years.

b) Exemptions for young companies are laid down in a Directive.

See also:

- Directive Track Record

LR11 Financial Reporting

a) Financial Statement Preparation

i. Financial statements must be prepared in accordance with an accounting standard recognized by MERJ Exchange.

ii. Recognized accounting standards include, but are not limited to:

a. International Financial Reporting Standards (IFRS)

b. U.S. Generally Accepted Accounting Principles (U.S. GAAP)

c. Other national accounting standards deemed equivalent by MERJ Exchange

See also:

b) Audit Requirements

The following lays down the audit requirements for prior years according to the stated listing standard:

i. Basic Standard: Financial statements for the most recent financial year must be at least auditor reviewed in accordance with –

a. International Standard on Review Engagements (ISRE) issued by the International Auditing and Assurance Standards Board (IAASB); or

b. equivalent standards according to the recognized accounting framework of the issuer.

ii. General Standard: Financial statements for the prior years must meet one of the following requirements:

a. If presenting two (2) years the statements must be auditor-reviewed in accordance with ISRE 2400 or ISRE 2410, or equivalent standards applicable under the recognized accounting framework.

b. If presenting only one (1) year, the financial statements must be fully audited in accordance with:

1. International Standards on Auditing (ISAs), as issued by the IAASB; or

2. Equivalent audit standards under the recognized accounting framework of the issuer.

iii. Main Standard: The financial statements for the required reporting period must be fully audited in accordance with:

a. International Standards on Auditing (ISAs), as issued by the IAASB; or

b. Equivalent auditing standards under the recognized accounting framework of the issuer.

See also:

c) Reporting History

The minimum reporting history required for each listing standard is as follows:

i. Basic Standard

The issuer must present at least one (1) year of financial statements.

ii. General Standard

The issuer must present either:

1. Two (2) years of auditor-reviewed financial statements; or

2. One (1) year of audited financial statements.

iii. Main Standard

The issuer must present three (3) years of audited financial statements.

d) Acceptable Audit Opinion for Previous Financial Year Reports

The financial statements for each financial year must have received an unqualified (clean) audit opinion unless the following conditions apply:

i. Acceptable Exceptions

A qualified audit opinion may be accepted if:

a. The qualification pertains to a technical matter that does not materially affect the issuer’s financial position, compliance, or operations, as determined by the Listing Committee.

b. The issuer provides written clarification and supporting evidence to the satisfaction of the Listing Committee.

ii. Disqualification Criteria

An application for listing will be rejected if the financial statements for any of the required financial years contain either of the following without a documented remediation plan approved by the Listing Committee prior to listing:

a. An adverse opinion or a disclaimer of opinion.

b. A qualified opinion that raises concerns regarding:

1. The issuer’s financial viability;

2. Material non-compliance with regulatory or accounting requirements; or

3. Deficiencies in governance or internal controls that could impact investor protection or market integrity.

LR12 Auditors

a) The issuer must appoint an external auditor that meets the requirements of these Listing Rules for each financial year.

b) The external auditor must:

i. Be independent of the issuer;

ii. Be registered as a public accounting firm with a body that is a member of the International Federation of Accountants (IFAC) or another body acceptable to MERJ Exchange; and

iii. Have adequate resources and experience to carry out the audit.

c) The issuer must report any change to its external auditor including reasons for the change and any disputes or concerns raised by the auditor.

d) Failure to appoint or maintain a qualified auditor in compliance with these Rules may result in suspension or trading or delisting of securities.

See also:

- Directive Auditor Qualifications

LR13 Auditor’s Report

a) Content of the Auditor’s Report

The auditor’s report must include a statement as to whether the issuer's financial statements:

i. Have been prepared in accordance with International Financial Reporting Standards (IFRS) or another recognized financial reporting framework;

ii. Present a true and fair view of the issuer’s financial position, results, and cash flows; and

ii. Comply with the applicable auditing standards, which must be:

a. International Standards on Auditing (ISAs), as issued by the International Auditing and Assurance Standards Board (IAASB); or

b. An equivalent auditing standard recognized by MERJ Exchange.

b) Requirement for an Unqualified Audit Opinion

i. The financial statements of all MERJ listed issuers must receive an unqualified (clean) audit opinion from an independent auditor.

ii. The following types of audit opinions will be considered a breach of the Listing Rules, unless explicitly approved by the Listing Committee under exceptional circumstances:

a. Adverse Opinion – Indicates that the financial statements do not fairly represent the financial position, results, or cash flows of the issuer.

b. Disclaimer of Opinion – Indicates that the auditor was unable to obtain sufficient audit evidence to form an opinion.

c. Qualified Opinion – Indicates that the financial statements contain material misstatements or limitations in scope that impact compliance.

iii. Exceptions:

A qualified opinion may be accepted only if:

a. The qualification relates to a specific technical issue (e.g., a minor accounting policy divergence) that does not materially impact the financial health, governance, or compliance of the issuer; and

b. The issuer provides a written explanation and supporting evidence to the satisfaction of the Listing Committee.

c) Rectification

Any listed issuer submitting financial statements with a modified audit opinion must take corrective actions as follows:

i. Adverse Opinion or Disclaimer of Opinion:

The issuer must submit a rectification plan addressing the identified issues for approval by the Listing Committee within 90 days.

ii. Qualified Opinion:

a. The issuer must:

1. Submit a rectification plan subject to review by the Listing Committee; or

2. Disclose why the qualification does not impact compliance with Listing Rules.

b. The Listing Committee may impose additional conditions before allowing continued listing.

iii. Emphasis of Matter:

If the audit report contains an Emphasis of Matter (indicating uncertainties or exceptional circumstances), the issuer must provide supplemental disclosures explaining the issue and any mitigating actions taken.

See also:

- Directive Form of Securities

LR14 Language

a) All documents sent to shareholders and any information required pursuant to these Listing Rules must be in English. Copies may also be available in the language of its origin or any additional language the issuer chooses unless the Listing Committee agrees otherwise.

b) If an English copy is submitted, no other copies or languages are required.

LR15 Capital Resources

The issuer must be solvent and not be subject to bankruptcy or reorganization proceedings.

LR16 Corporate Governance

The Board of Directors and committee composition must meet the requirements laid down in Section III. part C. Corporate Governance.

LR17 Further Requirements

a) To qualify for a listing according to the Main Standard, this issuer must meet at least one of the following additional requirements at the time of application:

i. Equity Standard

a. Shareholders' equity of at least USD 1 million; and

b. Market value of unrestricted shares totaling at least USD 5 million.

ii. Market Value Standard

a. Market value of unrestricted shares totaling at least USD 2 million; and

b. Total market value of listed securities of at least USD 10 million.

iii. Income Standard

a. Revenue from continuing operations of at least USD 2 million, or net income of at least USD 250,000 in the most recent fiscal year; and

b. Shareholders' equity of at least USD 1 million.

iv. Assets Standard

a. Total assets of at least USD 2 million; and

b. Net tangible assets of at least USD 2 million.

v. Preference Shares

a. At least 50,000 unrestricted preference shares held by public holders; and

b. Market value of unrestricted preference shares held by public holders of at least USD 250,000.

vi. Rights, Warrants, Convertible Debt, and Bonds

a. At least 100,000 rights or warrants issued;

b. For convertible debt or bonds, a minimum principal amount outstanding of USD 200,000.

b) The Listing Committee may determine further requirements for issuers where justified due to the nature of the issuer or the securities being listed.

2. Requirements for Securities

LR18 Legal Validity

At the time of listing, the securities must have been issued in accordance with and comply with all laws to which the issuer and those securities are subject, as well as these Listing Rules. The form of the securities must also comply with the law that applies to both the issuer and the securities.

See also:

LR19 Listing by Class

The listing must be for the entirety of the issued securities of the class or category.

LR20 Free Float

The securities must have an adequate free float at the time of listing:

a) Basic: No minimum free float requirement under the Basic Standard.

b) General: Minimum of 10% of the issuer’s total outstanding securities in the same class or category held by public holders.

c) Main:

i. Minimum of 20% of the issuer’s total outstanding securities in the same class or category held by public holders.

ii. No applicable to preference shares, warrants or convertible debt.

d) The Listing Committee, at its sole discretion, may allow a derogation from this requirement in the following circumstances:

i. The securities will be restricted to professional investors; or

ii. The securities to be listed are anticipated to be traded at a rate that allows for sufficient liquidity.

LR21 Tradability and Transferability

a) Tradability and transferability of the securities must be ensured.

b) A method for establishing legal ownership of the securities must be ensured.

c) Securities that are subject to approval or restrictions with respect to potential purchasers may be listed, subject to their tradability being guaranteed and there being no risk to the fulfillment of a transaction.

d) Securities may only be subject to transfer restrictions or compulsory redemptions where such transfer restriction or compulsory redemption is in the best interest of the issuer or its securities holders as a whole.

LR22 Denominations

The denominations forming the total value of a security must enable an exchange transaction in one round lot. However, MERJ may permit trading of fractionalized units for certain securities.

See also:

- MERJ Exchange Market Rules

LR23 Settlement

The securities must be eligible for clearing and settlement through one of the approved settlement systems or mechanisms approved by MERJ Exchange.

See also:

- MERJ Exchange Market Rules

LR24 Paying Agents, Exercise Agents, and Corporate Actions

a) The issuer must ensure that services pertaining to dividends and other corporate actions, including the receipt and handling of exercise notices, are provided in Seychelles or an approved jurisdiction as determined by MERJ Exchange and carried out in accordance with any Directive in force for the time being.

b) The issuer may assign the activities referred to in para. a) to MERJ Dep, a bank or securities firm in Seychelles or other approved jurisdiction as determined by MERJ Exchange and which has the necessary professional and technical capabilities and regulatory approvals to carry out such activities.

LR25 Listing in the Home Country

Securities from an issuer with a registered office in a country other than Seychelles that are not listed on a securities exchange either in the jurisdiction of the registered office or in the state in which the majority of shares are held may only be listed if the Listing Committee is satisfied that the listing is not intended to circumvent any fulfillment of investor protection regulations in those other jurisdictions.

LR26 Continued Fulfilment

LRs 9, 12, 13, 14, 15, 16, 18, 20, 21, 22, 23 and any additional requirements prescribed by the Listing Committee must be met on a continued basis.

B. Listing Obligations

1. Listing Particulars

LR27 Prospectus

Where the issuer is issuing a prospectus pursuant to the Securities Act 2007 or registered pursuant to the laws of another jurisdiction recognized by the Listing Committee, the Listing Committee may, at its sole discretion, exempt the company from issuing a separate Listing Particulars provided that the information that would normally be required in the Listing Particulars is provided for in the prospectus and any supplementary document, if necessary.

LR28 Content of the Listing Particulars

The Listing Particulars must provide sufficient information which would reasonably be required for investors to reach an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the issuer, as well as of the rights attached to the securities.

See also:

- Listing Particulars Schemes

LR29 Form of the Listing Particulars

a) As a general rule, the Listing Particulars must be a single document unless otherwise specified in these Listing Rules or authorized by the Listing Committee.

b) If the issuer intends to issue securities under an approved program or where the issue price and/or volume is/are not yet known at the time of submitting the application and Listing Particulars, this information may be provided at a later date as a supplement to the Listing Particulars with these two parts then forming the final Listing Particulars.

c) Producing the Listing Particulars in two parts is only allowed when all of the following conditions are met:

i. The criteria and/or conditions for establishing the missing information must be clearly explained in the Listing Particulars and subsequent Official Notice;

ii. The Official Notice must indicate that the missing information will be published no later than at the start of the first day of trading, be provided free of charge to interested investors, and state the intended form of publication of same;

iii. The first part of the Listing Particulars must be referred to as the Listing Particulars and not any other reference as the supplement will be included later to form the full Listing Particulars; and

iv. The supplement should include the issue price, issue volume, and/or any other additional information required, and the supplement must also state that the final Listing Particulars comprises the Listing Particulars together with its supplement.

f) Information may be included in the Listing Particulars by referencing one or more previously or simultaneously published documents ("reference documents") provided that the following requirements are observed:

i. The issuer must ensure that any information incorporated by reference to these reference documents contain the latest information available to the issuer;

ii. In circumstances where a reference is made to a reference document which contains information that is no longer accurate or is not the latest available information, this must be indicated in the Listing Particulars and the updated information must be provided;

iii. If reference is made to any specific portion of a reference document, then the Listing Particulars must specify the relevant portions to the investors;

iv. An incorporation by reference should usually be restricted to any of the following reference documents:

a. periodic interim financial statements;

b. previous auditors' reports and annual financial statements that have been drawn up in compliance with applicable financial reporting standards in accordance with LR 11;

c. documents that have been produced in association with a specific transaction such as a merger or spin-off;

d. documents and Listing Particulars that have previously been approved by the Listing Committee and published, provided that they are no more than 12 months old when the listing application is submitted;

e. information that has been sent to securities holders.

v. Reference documents that are to be incorporated by reference to the Listing Particulars must be submitted with the Listing Particulars at the same time as the Listing Particulars;

vi. The issuer must ensure that any reference document will be made available in printed form or electronically free of charge with no requirement for the requesting party to qualify their interest and the location of the reference document must be stated prominently in the Listing Particulars.

g) All Listing Particulars submitted to the Listing Committee must bear the word “DRAFT” on every page unless the Listing Committee has approved such a Listing Particulars.

h) Listing Particulars shall be valid for a period of six (6) months from the date of the approval.

i) The Listing Particulars must be published no later than the listing date.

j) Listing Particulars must include the information as prescribed in the relevant scheme for the type of security being issued and the nature of the activities of the issuer.

k) The Listing Particulars must include a statement from the issuer or guarantor which states that “the directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.”

LR30 Abridged Listing Particulars

a) The Listing Particulars may be abridged if securities from the same issuer are already listed on MERJ Exchange or a recognized overseas securities exchange, and if any new securities are offered, it is limited to holders on the basis of ordinary or preferential subscription rights, either free of charge or against payment.

b) The relevant Listing Particulars schemes contain guidance as to the content that may be omitted to abridge the Listing Particulars.

LR31 Exemption of Specific Information from Listing Particulars

a) The Listing Committee may, at its sole discretion, authorize the omission of certain information from the Listing Particulars of an issuer if requested and the issuer can satisfy that:

i. the information is of minor importance and will have no bearing on the assessment of the assets and liabilities, financial position, profits and losses of the issuer; or

ii. the securities that are to be listed are also listed on another exchange in a recognized jurisdiction and the issuer's periodic reporting has complied with the financial reporting requirements laid down in these Listing Rules for the last three years; or

iii. disclosure of the information would be seriously detrimental to the issuer (e.g. trade secrets, proprietary information, incomplete negotiations, etc.) and the omission will not mislead investors or potential investors to the facts and circumstances necessary to make an informed assessment of the issuer and characteristics for the securities in question.

b) The issuer and its directors will be held liable for any unauthorized omission from the Listing Particulars that may have influenced the decision of the Listing Committee in granting a listing, or the investors or potential investors in making an informed investment decision.

See also:

- Listing Particulars Scheme - Equities

- Listing Particulars Scheme - Investment Entities

- Listing Particulars Scheme - Bonds

- Listing Particulars Scheme - ETPs

- Listing Particulars Scheme - Derivatives

- Listing Particulars Scheme – Depository Securities

2. Official Notice

LR32 Official Notice

The issuer must publish an Official Notice.

LR33 Purpose

The purpose of the Official Notice is to draw investors’ attention to:

a) the listing or transaction for which an application has been submitted;

b) the option for obtaining a prospectus, Listing Particulars, and any addendum, if any, free of charge including details if it is in available in printed from as well as where it can be accessed electronically;

c) if the issuer is not required to prepare a prospectus or prepares Abridged Listing Particulars, it must be explicitly mentioned;

LR34 Time of Publication

The Official Notice must be published no later than 8:00 a.m. UCT +4 on the day of the listing.

3. Further Disclosure Obligations

LR35 Additional Information Documents

The Listing Committee may require the issuer to publish additional documents and information that affect the position of investors in a form approved by the Listing Committee.

C. Listing Procedures

LR36 Methods of Listing

a) Except as otherwise restricted in these Listing Rules, MERJ Exchange will ordinarily consider any listing methods provided that the issuer meets these Listing Rules, relevant applicable law, and the Listing Committee agrees with the method.

b) The intended listing method should be discussed early in the application process with MERJ Exchange to ensure the method is deemed acceptable for the circumstances relating to the issuer.

c) Issuers with a primary listing according to the Basic Standard may not raise capital pursuant to a public offering.

LR37 Listing Application

a) An application must be submitted before securities may be listed on MERJ Exchange except where otherwise prescribed.

- Directive Procedures for Debt Securities

- Directive Procedures for Exchange Traded Products

- Directive Procedures for Depository Securities

LR38 Submitting a Listing Application

The listing application must be submitted by a Recognized Representative.

See also:

- Directive Recognized Representatives

LR39 Content of Listing Application

a) The application must contain a short description of the securities and a request regarding the planned first trading day, as well as a reference to the enclosures to the application that are required by the Listing Committee.

b) If certain listing requirements are not met, the listing application must highlight the relevant LRs and provide a well-founded request for an exemption.

LR40 Issuer Declaration

Prior to the planned listing date, the issuer must submit a duly signed declaration containing specified confirmations.

See also:

- Issuer Declaration

476KB

Issuer Declaration.pdf

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LR41 Recognized Representative Declaration

Prior to the planned listing date, the Recognized Representative must submit a duly signed declaration containing specified confirmations.

See also:

- Recognized Representative Declaration

17KB

Recognized Representative Declaration.docx

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LR42 Review of Listing Application

The Listing Committee will review the listing application on the basis of the documents submitted.

LR43 Decision

a) The Listing Committee will review the application based on the documents that have been submitted.

b) The Listing Committee will approve the listing application if it fulfils the requirements laid down in these Listing Rules. Such approval may be subject to further requirements and/or conditions.

c) If the requirements are not fulfilled, the Listing Committee will refuse the application either finally or pending a renewed application in which all conditions are met.

d) In the event that the Listing Committee considers an application and votes to refuse the listing, prior to making its decision final, it must:

i. inform the applicant of its intention to refuse the application;

ii. provide the applicant with the reasons for its intended refusal; and

iii. call upon the applicant to show cause within a period specified by MERJ Exchange as to why the application should not be refused.

e) Listing does not constitute a value judgment about the securities or the issuer.

f) The decision of the Listing Committee will be communicated in writing. Where the application is approved the communication will include the listing standard and market on which the securities in question will be traded.

LR44 Preliminary Decision

a) The applicant may request a preliminary decision by the Listing Committee.

b) If the issuer is in the process of fundraising through an offering as part of its application for admission, admission to MERJ Exchange will be conditional upon the outcome of that offering, which may require, at the discretion of MERJ Exchange, an announcement confirming the outcome of the fundraising, and that any applicable minimum subscription has been reached and that the securities have been unconditionally allotted.

i) An issuer has six (6) months from the approval of the Listing Particulars to conclude a placement of its securities, or the issuer must apply to the Listing Committee for an extension, which may be granted at the sole discretion of MERJ Exchange.

LR45 Prohibition on Publication

No admission document of an issuer is to be published or otherwise made available to the investment community until approved by the Listing Committee.

III. CONTINUING OBLIGATIONS

A. Interim and Annual Reporting

LR46 Annual Report

The issuer is required to publish an annual report comprising audited financial statements, the corresponding auditor report (LR 13) and any additional information required as laid down by Directive.

See also:

- Directive Corporate Governance

LR47 Interim Report

a) The issuer is required to publish at least semi-annual reports based on the listing standard applicable to the issuer and any additional information required as laid down by Directive.

b) There is no need for the interim financial statements to be audited or reviewed by an auditor.

c) If quarterly financial statements are published, they must be drawn up using the same principles as the semi-annual statements.

d) The issuer is encouraged to include a business update covering -

i. A brief overview of the issuer's financial performance or other KPIs.

ii. Updates on any significant events or developments.

iii. Any other information necessary for an informed assessment of the issuer's activities.

See also:

LR48 Financial Reporting Standards

Annual and interim financial statements must be drawn up according to a financial reporting standard recognized by the Listing Committee and the listing standard applicable to the issuer.

See also:

- Directive Management Transactions

LR49 Closed Periods

a) The time between the completion of an issuer’s financial results and the announcing of these results to the public is a “closed period”.

b) In addition to general prohibition on insider trading, Affected Employees are prohibited from trading in the issuer’s securities or derivatives thereof during a closed period.

c) In addition to the general prohibitions on trading pursuant to clause b), the following specific periods are considered closed periods for issuers with a primary listing pursuant to the stated standard:

i. General Standard

a. Interim Reporting - ten (10) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

b. Annual Reporting - fifteen (15) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

ii. Main Standard

a. Interim Reports - fifteen (15) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

b. Annual Report – twenty-five (25) calendar days prior to the earlier of the previously published date for publication of the interim financial statements or the latest date permitted according to these Listing Rules

B. Other Duties to Provide Information

LR50 Corporate Calendar

a) The issuer is required to maintain a calendar or important events and corresponding dates that may be material for an investor (annual general meeting dates, publication deadlines for interim and annual reports) covering at least the current financial year and keep it up to date.

b) The issuer must provide MERJ Exchange with the URL on the issuer’s website and MERJ may publish this link electronically.

LR51 Regular Disclosures

a) Issuers must promptly disclose material information about their business and rights attached to securities as laid down by Directive.

b) For changes in rights attached to securities the corresponding notification must be made in ample time and by suitable means for investors to exercise their rights.

LR52 Price-sensitive Facts

a) The issuer must promptly disclose any price-sensitive facts that are not public knowledge and that could have a significant impact on the price or value of their securities. A significant impact is anything considerably greater than the usual price fluctuations or that can affect a reasonable market participant in his investment decision.

b) The disclosure must be made as soon as the issuer is aware of the main points of the price-sensitive fact.

c) The method of disclosure must ensure the equal treatment of the investment community.

LR53 Postponement of Disclosure

a) The issuer may postpone the disclosure of a price-sensitive fact if the fact is based on plans or decisions of the issuer and its disclosure might prejudice the legitimate interests of the issuer.

b) The issuer must have internal controls and policies that ensure only those who need to know are aware of the price-sensitive facts and internal rules and processes to ensure that the price-sensitive facts remain confidential for the duration of the time the disclosure is postponed. If the price-sensitive facts leak, the market must be informed without delay pursuant to LR52.

LR54 Management Transactions

a) Insider Reporting Requirement An issuer with a primary listing on MERJ Exchange must ensure that its directors, management, their spouses, and children (“insiders”) report transactions in the issuer’s equity securities or related financial instruments to the issuer by the second trading day following the transaction.

b) Scope of Reportable Transactions

i. Transactions affecting the assets of a person subject to the reporting obligation must be reported unless the person cannot influence the execution of the transaction.

ii. Transactions by related parties must be reported if they occur under the significant influence of a person subject to the reporting obligation. Direct transactions between such persons and related parties are also reportable.

c) Notification Details The notification to the issuer must include:

i. Name and date of birth of the person reporting; ii. Role of the reporting person (e.g., executive/non-executive board member or management); iii. For related party transactions, whether the transaction was made by a natural person or legal entity; iv. Type of transaction; v. Type, total amount, and ISIN of the securities or, if no ISIN, the main terms of the instruments; vi. Total transaction value; vii. Transaction date (or execution date for stock exchange trades); viii. Notification date.

d) Issuer’s Reporting Obligation The issuer must report the information outlined in paragraph c) within two days of receiving it.

e) Publication by MERJ MERJ will publish the reported information, excluding the name and date of birth of the individual.

See also:

- Securities Act 2007

LR55 Notification of Non-Compliance

a) Issuers must promptly notify MERJ Exchange if they become aware of any non-compliance with the Listing Rules or applicable regulations.

b) The notification should include details of the non-compliance and steps taken to rectify the situation.

C. Corporate Governance

LR56 Introduction

Corporate governance is essential for maintaining investor confidence and ensuring the integrity of the market. These requirements are designed to promote high standards of corporate governance among issuers listed on MERJ Exchange, with requirements proportionate to the size and complexity of the issuer.

LR57 Application of Corporate Governance Requirements

The Corporate Governance requirements are applied proportionally based on the listing standard under which the issuer is listed:

Basic Standard: Minimal governance requirements suitable for smaller or early-stage companies.

General Standard: Moderate governance requirements balancing compliance burden and investor protection.

Main Standard: Comprehensive governance requirements reflecting higher expectations for larger or more established companies.

LR58 Board of Directors

a) Composition by Listing Standard

a) Basic Standard: The issuer must have a board of directors with at least two (2) independent directors.

b) General Standard: The issuer must have a board of directors with at least two (2) independent directors and an Audit Committee composed of least a majority independent directors.

c) Main Standard: The issuer must have a board of directors with at least three (3) directors, the majority of which must be independent directors.

b) Definitions

"Executive Officer" when used with reference to a company, means its CEO/president, CFO/principal financial officer, Controller/principal accounting officer (or, if there is no such accounting officer, the controller), any heard or vice-president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the company. Executive officers of subsidiaries or parents of the company are deemed executive officers of the company if they perform such policy-making functions for the company.

"Independent Director" means a person who is not an Executive Officer or employee of the Issuer and who does not have a relationship that the board believes would interfere with the exercise of independent judgment in carrying out director responsibilities. For this rule, "Family Member" includes a person's spouse, parents, children, siblings, in-laws, and anyone who shares their home. The following persons are not considered independent:

A director who is or was employed by the issuer in the past three years;

A director who received compensation over $120,000 from the during any twelve consecutive months in the past three years, except for board service, compensation to a Family Member who is a non-executive employee, or benefits under a non-discretionary compensation plan;

A director with a Family Member who is or was an Executive Officer of the Issuer in the past three years;

A director who, or whose Family Member, is a partner, controlling Shareholder, or Executive Officer of an entity that received payments from the issuer exceeding 5% of that entity’s gross revenues or $200,000 in the current or past three fiscal years, other than for investments in the issuer's securities or non-discretionary charitable contributions;

A director who, or whose Family Member, is employed as an Executive Officer of another entity where any of the issuer’s Executive Officers serve on that entity’s Compensation Committee;

A director who, or whose Family Member, is a current partner of the issuer's outside auditor, or was a partner or employee of the issuer's outside auditor and worked on the issuer's audit during the past three years.

The three-year look-back period for relationships starts when the relationship ends. Employment as an interim Executive Officer for up to one year does not disqualify a director from being independent afterward, though participation in financial statement preparation would preclude audit committee service for three years.

c) Cure Period for Majority Independent Board

If non-compliance is due to one vacancy or a director ceasing to be independent beyond their control, the issuer must regain compliance by the next annual shareholders meeting or within one year, whichever is sooner. If the annual meeting is within 180 days of the event, the issuer has 180 days to regain compliance. The issuer must notify MERJ immediately upon learning of non-compliance.

LR59 Audit Committee

a) Requirements by Listing Standard

i. Basic Standard: The establishment of an Audit Committee is optional. The full board may oversee audit functions.

ii. General Standard: The issuer must establish an Audit Committee composed of at least a majority independent directors.

iii. Main Standard: The issuer must establish an Audit Committee composed of at least three (3) directors, with a majority being independent directors.

b) Cure Periods for Audit Committee:

i. If a committee member ceases to be independent for reasons beyond their control, they may remain on the Audit Committee until the next annual shareholders meeting or one year from the event causing non-compliance, whichever is sooner. The issuer must notify MERJ immediately upon learning of non-compliance.

ii. If there is one vacancy on the Audit Committee and no other member is relying on the cure period, the issuer has until the next annual shareholders meeting or one year from the event causing non-compliance to regain compliance. If the annual meeting is within 180 days of the event, the issuer has 180 days to regain compliance. The issuer must notify MERJ immediately upon learning of non-compliance.

LR60 Phase in Period for Independent Directors and Audit Committee

A Company applying for listing pursuant to the General Standard may submit a written request, which may be granted by the Listing Committee in its sole and absolute discretion, to be permitted to phase in its compliance with the corporate governance standards set forth in this LR58 as follows:

a) At least one member of the Board of Directors and the Audit Committee must be independent at the time of application;

b) At least two members of the Board of Directors and a majority of the members of the Audit Committee must satisfy the independence requirement within the later of 90 days after the Company begins trading on MERJ Exchange or the time of the Company’s next shareholder meeting. In any event, the independence requirement must be satisfied within one year of the Company joining MERJ Exchange.

LR61 Code of Conduct

a) All issuers must adopt a Code of Conduct applicable to directors, officers, and employees.

b) The Code of Conduct should address:

Ethical behavior and compliance with laws.
Managing conflicts of interest.
Protection and proper use of company assets.
Confidentiality of material information that has yet to be published.
Trading policy including prohibition of Affected Employee’s trading during closed periods, insider trading, reporting requirements for trades of substantial shareholders, and consequences and potential penalties for violations of this policy including potential termination of employment and potential legal consequences.

c) The Code of Conduct must be made publicly available.

LR62 Financial Reporting and Controls

a) The Board of Directors is responsible for ensuring the integrity of the issuer's financial reporting and internal controls.

b) Basic Standard issuers may fulfill this responsibility through Board of Directors oversight.

c) General and Main Standard issuers must establish appropriate processes and, where applicable, committees to oversee financial reporting and internal controls.

LR63 Shareholder Rights and Meetings

a) Issuers must facilitate the effective exercise of shareholder rights.

b) An Annual General Meeting (AGM) must be held within six (6) months of the financial year-end.

c) Notice of meetings must be given to shareholders in a timely manner, specifying the date, time, venue, and agenda.

a) All related party transactions must be conducted on terms equivalent to those prevailing in arm's length transactions.

b) Issuers must have processes for reviewing and approving related party transactions, which may be overseen by the Board of Directors, the Audit Committee or another independent body.

LR65 Corporate Actions

a) Announcements

The issuer must provide timely notice of certain corporate actions, including dividends, stock splits, reverse splits, name changes, mergers, acquisitions, dissolutions, change in nature of securities, bankruptcies or liquidations, at least 10 business days prior to the record date.

b) Share Buybacks

i. A share buy-back occurs when an issuer or its subsidiary buys back its own securities from investors, either in the market or by making a formal offer , which decreases the number of issued shares in the market.

ii. An issuer shall not make any payment in whatever form to acquire any previously issue securities if there are reasonable grounds for believing that:

a. the issuer would be unable to pay its debts in the ordinary course of business after the purchase of its securities; or

b. the liabilities of the issuer would exceed by the assets after the repurchases had been completed.

iv. An issuer may proceed with the buy-back of its securities only upon receiving approval from MERJ Exchange as to the terms and conditions of the share buy-back.

v. Any shares acquired in a share buy-back must be cancelled by the issuer upon completion of the acquisition.

c) New Issuances

i. General Principle

Any new issuance of securities must ordinarily first be offered to existing holders of the issuer’s listed securities on a pro rata basis before being offered to other investors where such issuance would have a dilutive effect on those holders either immediately or in the future (e.g. convertible debt, options, warrants). This requirement ensures that existing shareholders have the opportunity to maintain their proportional ownership in the issuer.

ii. Exceptions to the General Principle

The requirement to offer new securities pro rata to existing shareholders shall not apply in the following circumstances:

a. Issuances Related to Acquisitions or Strategic Transactions

The issuance of securities as consideration in a bona fide acquisition, merger, consolidation, or similar strategic transaction, provided that –

1. The transaction has been approved by the issuer’s Board of Directors; and

2. The issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained.

b. Public Offerings

The issuance of securities through a public offering, whether by way of an initial public offering (IPO), follow-on offering (FPO), or other similar mechanisms.

c. Private Placements

The issuance of securities in a private placement to professional investors or equivalent in relevant jurisdictions of the investors, provided that the issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained by an ordinary resolution.

d. Convertible Debt or Other Instruments

The issuance of securities pursuant to the conversion of convertible debt or other convertible instruments, where the terms of such instruments have been previously approved by the Board of Directors and, where required, by the shareholders.

e. Debt-to-Equity Conversion

The issuance of securities to convert outstanding debt into equity as part of a debt restructuring plan, provided that -

1. The conversion has been approved by the issuer’s Board of Directors and, where necessary, by the shareholders;

2. The conversion terms are disclosed, including the potential dilutive impact on existing ownership;

3. The conversion complies with the issuer’s Articles, applicable laws and regulations;

4. The issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained by an ordinary resolution.

f. Employee Stock Plans

The issuance of securities pursuant to employee stock ownership plans, stock options, or other employee benefit plans duly approved by the issuer’s Board of Directors and, where necessary, by shareholders.

g. Regulatory or Legal Requirements

The issuance of securities to comply with regulatory or legal requirements, such as to meet capital adequacy requirements imposed by a regulator.

h. Issuances Below Specified Thresholds

Issuances that result in the issuance of securities amounting to less than 20% of the outstanding shares of the relevant class prior to the issuance over any rolling 12-month period provided that the issuance price shall not be below 90% of the closing price on the trading day immediately preceding the agreement for issuance, unless specific shareholder approval is obtained by an ordinary resolution.

i. Shareholder-Approved General Authority

The issuance of securities pursuant to a general or specific authority granted by shareholders at a general meeting, allowing directors to issue up to 20% of the total outstanding shares for a period not exceeding 12 months.

j. Other Exceptions Approved by the Exchange

Any other issuance specifically approved by MERJ Exchange as being in compliance with the principles of fairness and transparency.

iii. Disclosure and Approval Requirements

a. Issuers must provide full and timely disclosure of any new issuance of securities, including the terms, purpose, and potential dilutive impact on existing shareholders.

b. Shareholder approval by ordinary resolution must be sought for new issuances where required under applicable law, regulation or the issuer’s Articles.

LR66 Compliance with Applicable Laws

All corporate actions must comply with the applicable laws, regulations and Articles of the issuer.

LR67 Continuous Improvement

Issuers are encouraged to continuously evaluate and improve their corporate governance practices beyond the minimum requirements.

IV. Suspension of Trading, Delisting and Cancellation

LR68 Suspension of trading

a) MERJ Exchange may, at its own discretion, or on the request of an issuer, suspend the trading of a listed security where unusual circumstances exist (e.g. a suspected breach of these Listing Rules, an important disclosure event of the issuer has yet to be disclosed or where there is unusual trading activity) indicates such a suspension is advisable.

b) The suspension may be lifted once conditions return to normal, including any necessary disclosure requirements having been published as applicable.

LR69 Delisting of securities

a) The Listing Committee may cancel a listing of securities in the following cases:

i. following a justified application to delist by an issuer which must include confirmation that the necessary approvals have been obtained and a signed declaration stating the reasons for the application. The Listing Committee must take into account the interests of trading on MERJ Exchange, investors and the issuer and may make delisting conditional upon due notice and the observance of appropriate waiting periods.

ii. if the solvency of the issuer is in serious doubt, or insolvency or liquidation proceedings have already commenced, the securities will be delisted no later than the time at which their tradability is no longer guaranteed;

iii. if the Listing Committee deems that there is no longer a sufficiently liquid market in the securities;

iv. if trading has been suspended for a continuous three-month period, and the reasons for the suspension continue to exist; or

v. if the listing requirements specified in LR26 are no longer fulfilled.

b) If the auditor resigns, is terminated or ceases to meet the requirements of LR12 a new auditor must be retained within a reasonable amount of time to be determined by MERJ Exchange. If the issuer does not appoint a suitably qualified auditor pursuant to LR12 by the expiry of the allotted time, the Listing Committee will instigate delisting proceedings.

c) Before commencing involuntary delisting procedures relating to listed securities of a MERJ issuer, MERJ Exchange will:

i. inform the issuer in writing of its intention to delist the security;

ii. provide the issuer with the reasons for the intended delisting of the security; and

iii. call upon the issuer to show cause, within a period determined by MERJ Exchange, why the delisting should not be affected.

See also:

- Directive Delisting

V. Recognized Representatives

LR70 Recognized Representatives

a) A Recognized Representative is a person who has submitted an application and been recognized by MERJ Exchange as having met the necessary competency requirements of MERJ Exchange.

b) The primary obligation of a Recognized Representative is to ensure that the initial and continuing listing obligations of an issuer are met and tasks assigned to it are carried out with due care and in good faith.

See also:

- Directive Recognized Representatives

VI. Sanctions

LR71 Responsibility and Procedure

Responsibility for instigating and conducting sanction proceedings is governed by the Rules of Procedure.

See also:

- Directive Recognized Representatives

LR72 Breaches by Issuers, Guarantors or Recognized Representatives

Sanctions may be imposed in the event that an issuer, guarantor or Sponsor Advisor commits a breach of these Listing Rules, the Additional Rules or their implementing provisions (specifically breaches of duties to cooperate and to provide or disclose information), or in the

See also:

LR73 Sanctions

a) One of more of the following sanctions may be imposed on a MERJ issuer or its guarantor:

i. censure;

ii. publish the fact that there was a censure;

iii. suspension of trading;

iv. levy a fine of up to SCR 10,000 for negligence or SCR 100,000 in cases of wrongful intent;

v. delisting or reallocation to a different regulatory standard;

vi. withdrawal of recognition.

b) One or more of the following disciplinary measures may be taken against a Sponsor Advisor:

i. warning;

ii. reprimand;

iii. issue of a new registration decision under stipulations and/or conditions;

iv. suspension of registration (for two years at most);

v. withdrawal of registration.

c) In determining the sanction, the competent body shall consider the severity of the infraction and the degree of fault. In the case of a fine, the competent body will consider the potential impact of the sanction on the party concerned.

See also:

VII. Appeals

LR74 Right to Appeal

a) An issuer, guarantor or applicant has the right to appeal any final decision made by the Listing Division or the Listing Committee regarding listing applications, suspensions, delistings, or sanctions in certain cases.

b) An appeal may only be submitted pursuant to para. a) if the aggrieved party believes that the decision was made based on incorrect facts, misinterpretation of the Listing Rules, any procedural irregularities or proportionality of the sanction.

c) Shareholders may submit appeals on delisting decisions that materially affect their rights or the value of their investment. Such appeals must clearly demonstrate how the decision directly impacts the shareholder’s interests and be supported by relevant evidence. Shareholders are not permitted to appeal delisting decisions based on LR a) ii. to iv., a delisting order by sanctions or delisting of open-ended funds.

LR75 Appeal Process

a) Shareholder appeals will be considered by the Listing Committee.

b) Appeals relating to sanctions will be heard by an independent body and proceedings are governed by the Rules of Procedure.

See also:

LR76 Appeal Decisions

a) Decisions of the Appeals Committee may uphold, modify, or reverse the initial decision.

b) All appeals decisions are final and binding on all parties involved.

See also:

- MERJ Exchange Market Rules

VIII. Fees

LR77 General Principles

a) All fees associated with listing, continued listing, and specific transactions must be paid in full by the issuer or applicant as per the fee schedule determined by MERJ Exchange.

b) Fees are set periodically by MERJ Exchange and may vary by listing standard (Basic, General, Main) or by the nature of the securities listed (equities, bonds, derivatives, ETPs, etc.).

c) MERJ Exchange reserves the right to adjust fees from time to time. Any changes to fees will be communicated in advance and published on the MERJ Exchange website.

See also:

- Listing Fees

LR78 Types of Fees

a) Initial Listing Fees: A one-time fee payable upon submission of an application for the listing of securities. This fee is non-refundable, even if the application is withdrawn or denied.

b) Annual Fees: An annual fee payable by listed issuers to maintain their listing status on MERJ Exchange. Annual fees are due on the anniversary date of the initial listing or as specified by MERJ Exchange.

c) Transaction Fees: Fees that may apply to specific transactions, such as the listing of additional securities, capital increases, corporate actions (e.g., stock splits, mergers, spin-offs), or any other activities requiring approval by the Listing Committee.

d) Delisting Fees: Issuers applying for voluntary delisting are required to pay a delisting fee as determined by the MERJ Exchange fee schedule.

e) Appeal Fees: Appeals against decisions of the Listing Committee are subject to a non-refundable appeal fee, payable upon submission of the appeal.

LR79 Payment Terms

a) Fees are payable within 30 days of the issuance of an invoice by MERJ Exchange unless otherwise specified.

b) Non-payment of fees may result in suspension or delisting of the issuer’s securities from MERJ Exchange. MERJ Exchange may also charge interest on overdue fees at a rate set by its policies.

c) In cases where an issuer fails to meet its fee obligations, MERJ Exchange reserves the right to seek recovery of the fees through legal means, including the recovery of any associated legal costs.

LR80 Refunds and Adjustments

a) Fees are generally non-refundable. However, under exceptional circumstances, MERJ Exchange may, at its sole discretion, grant partial refunds or fee adjustments.

b) Requests for fee adjustments or refunds must be submitted in writing, with a clear justification, within 30 days of payment.

IX. Special Additional Provisions

The provisions in this section apply in addition or as an alternative to LR1 to LR80 in the following specific cases.

A. Investment Entities

LR81 General

An Investment Entity must comply with the Main Standard of these Listing Rules except for LR 17 or as modified by this Part A.

LR82 Scope

This Part A covers Investment Entities, Single Asset Investment Entities, Real Estate Investment Entities, Open-Ended Funds, Closed-Ended Funds, Feeder Funds, Venture Capital Funds and Exchange Traded Funds (ETF).

1. Listing Requirements

LR83 Duration

The requirements of LR10 (Duration) do not apply to Investment Entities.

See also:

- Directive Track Record

LR84 Previous Annual Financial Statements

The requirements of LR11 (Previous Annual Financial Statements) do not apply to Investment Entities.

LR85 Free Float

a) The minimum capitalization and free float requirements specified in LR20 (Free Float) may be waived for an Investment Entity in appropriate circumstances and shall not apply to open-ended funds, except for Exchange Traded Funds (ETFs).

b) The requirements in paragraph b) above will automatically be waived if a MERJ Exchange member undertakes to act as a market maker for the securities to be listed.

c) MERJ Exchange may include implementing provisions regarding market making in its Market Rules or in a Directive.

See also:

LR86 Investment Policy

a) The principles of the Investment Policy must be set out in the Articles of the Investment Entity. Details of the Investment Policy must be included in company regulations or other official documents, all of which must be obtainable from the issuer or at an office in Seychelles designated in the Listing Particulars.

b) The Listing Committee may require a minimum level of investment to be achieved by the time of the initial listing if the Investment Policy and investment guidelines are open or imprecise.

c) The Investment Entity must be a passive investor and must not seek or take legal or management control of any of its portfolio companies, except in the case of underlying investments which are open-ended funds or in the case of a Real Estate Investment Entity.

LR87 Management

a) If the issuer does not fully satisfy LR10 (Duration) and LR11 (Previous Annual Financial Statements), the operators of the Investment Entity must collectively have appropriate and relevant experience and expertise, to the satisfaction of the Listing Committee, in relation to the types of investments of the Investment Entity, the targeted investors, and their specific roles.

b) If the operator referred to in paragraph a) is regulated to operate collective investment schemes or manage the type of investments contemplated for the Investment Entity by the Financial Services Authority or an equivalent authority in a recognized jurisdiction, it will be deemed to fulfill the requirements in paragraph a).

c) Where the issuer cannot fully satisfy LR10 and LR11 and the Listing Committee is not satisfied with the fulfillment of the requirements in paragraph a), the issuer must appoint and retain an independent investment advisor or investment body with suitable experience and expertise (to the satisfaction of MERJ Exchange) and a suitable track record. All principal and key parties appointed in relation to the Investment Entity must be satisfactory to MERJ Exchange.

LR88 Safekeeping and Custody

a) An Investment Entity must appoint one or more custodians to be responsible for the safekeeping and custody of cash and underlying instruments.

b) For derivative contracts that are not securitized derivatives, the provisions relating to safekeeping and custody of instruments set out in paragraph a) do not apply to such derivatives contracts entered into by the Investment Entity with a particular counterparty or to the related derivative cash position held with that counterparty, provided that an amount of the related derivative cash position at least equivalent to the Investment Entity’s exposure to that counterparty is held in a manner that meets the requirements of paragraph c).

c) For any cash portions of a relevant derivatives cash position, they must be:

i. Subject to regulations in Seychelles or a recognized jurisdiction relating to holding client monies; or

ii. Held with an entity that satisfies the financial resources requirement; or

iii. If consisting of items other than cash:

a. Held such that the Investment Entity (or its custodian) retains beneficial ownership of the liquid assets comprised in the derivative cash position and does not take credit risk in respect of such liquid assets on the counterparty or other person with which they are held; or

b. Held with an entity that satisfies the financial resources requirement.

d) The operators of the Investment Entity must:

i. Ensure that the amount of liquid assets held with the relevant counterparty does not exceed a level deemed reasonably prudent, considering the counterparty’s creditworthiness;

ii. Appoint an administrator or other suitable entity responsible for carrying out periodic verification and reconciliation of the Investment Entity’s position. This entity must be separate and independent from the investment manager or operators;

iii. Report any significant discrepancies identified during reconciliation or verification to MERJ Exchange without delay;

iv. Appoint a person to verify the value of its over-the-counter (OTC) derivative positions in accordance with LR89 and ensure that the policies and procedures for valuing those positions are appropriate and described in the Listing Particulars.

e) A custodian must be a separate legal entity from the issuer, operators or investment managers and, if applicable, any investment advisors. It is permissible for a custodian to be a related entity to one of these parties.

f) The terms of appointment of any custodian must be laid out in a custody agreement outlining the custodian’s responsibilities regarding the assets of the Investment Entity.

g) Any custodian of underlying instruments must be regulated and have suitable and relevant experience in providing custody services for the types and forms (e.g. Digital Assets) of instruments to the satisfaction of MERJ Exchange.

h) A licensed financial institution in Seychelles or a recognized jurisdiction, or another jurisdiction with equivalent prudential regulation and supervision, will generally be accepted as complying with this rule.

i) A custodian of virtual assets may include a licensed and regulated bank, depository or custodian in Seychelles or a recognized jurisdiction provided the following requirements are met:

i. the assets must always be ready for the issuer;

ii. the assets can be allocated either individually to the issuer or to a community, provided it is clear what share of the community assets the issuer is entitled to.

j) The operators, custodian, or investment manager of an Investment Entity that is a multi-manager fund or a fund of funds must ensure that adequate custody arrangements have been made by the investment manager or Investment Entity for the underling instruments in which the Investment Entity will invest.

LR89 Calculation of Net Asset Value (NAV)

a) The method of valuation of the assets must be in accordance with the applicable accounting standards for the Investment Entity.

b) The Investment Entity must demonstrate to MERJ Exchange that it has adequate arrangements for the calculation of the NAV of its securities, paying special attention to potential conflicts of interest, or it must appoint an independent fund administrator to perform this function.

c) The valuation must be verified at least annually by a person independent of the Investment Entity, the investment manager, the custodian, the depositary, the broker, and the operators of the Investment Entity. This may be the independent auditor or the Investment Entity's administrator.

LR90 Foreign Funds

Investment Entities incorporated abroad and not subject to authorization in Seychelles under the Mutual Fund and Hedge Fund Act 2008 must be incorporated under the company law of a recognized jurisdiction.

LR91 Listing Particulars

a) The issuer must submit Listing Particulars containing the information prescribed in the relevant scheme, including any additional information for the type of Investment Entity.

b) Where the Investment Entity is a segregated portfolio company and the application relates to a class of securities that will be segregated and ring-fenced (in a "Cell"), the information required in the Listing Particulars may be limited to that which is relevant to holders of securities in that particular Cell.

c) In the case of an Investment Entity regulated as a collective investment scheme by the Seychelles Financial Services Authority or a recognized overseas regulatory authority and subject to standardized prospectus requirements, the Investment Entity may present this prospectus plus the following additional information as the Listing Particulars:

i. Security number/ISIN;

ii. Trading currency;

iii. Clearing agent;

iv. Form of the securities;

v. Information on the NAV performance for the past three years, where available;

vi. A duly signed declaration containing confirmations required by MERJ Exchange;

vii. A declaration that the latest annual and interim reports constitute an integral part of the Listing Particulars;

viii. Paying agent;

ix. Primary exchange (if applicable).

d) The specific risks associated with investing in Investment Entities must be prominently stated in every publication connected to the listing, particularly the Listing Particulars and Official Notice.

e) Disclosures must cover risks associated with the Investment Entity's investment policy, underlying instruments, investment techniques, valuation uncertainties, and any material counterparty, collateral, custody, or settlement risks.

f) Unless MERJ Exchange agrees otherwise, a statement that the directors do not anticipate that an active secondary market in the securities will develop must be included.

See also:

- Listing Particulars Scheme - Investment Entities - Issuer Declaration

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2. Continuing Obligations

LR92 Annual Reporting

a) The Investment Entity must publish annual in accordance with LR46 and LR47, including any additional information determined by the Listing Committee. The notes to the annual financial statements must be confirmed by the auditors.

See also:

- Directive Corporate Governance

LR93 Interim Reporting

The Listing Committee may prescribe additional or different requirements in terms of the content and intervals for interim reporting by different types of investment entities and these requirements must be adhered to at all times by the investment entity.

See also:

LR94 Publication of Current Value (NAV)

The Investment Entity must publish the NAV of its investments at regular intervals and at least annually except for open-ended funds (quarterly) and ETFs (daily). MERJ Exchange may prescribe more frequent reporting intervals.

LR95 Valuation of Assets that are Difficult to Assess

If the underlying assets are difficult to value or lack marketability, the Investment Entity must observe any special disclosure requirements laid down by the Listing Committee.