Additional Rules (Derivatives)
I. PURPOSE AND SCOPE
Art. 1 Purpose
The purpose of these Additional Rules for Derivatives (ARD) is to specify the necessary information to enable investors to evaluate the characteristics of Derivatives and the qualifications of the issuer, as well as to outline the continuous disclosure obligations that ensure fair trading practices on MERJ Exchange.
Art. 2 Scope
1. These ARD apply to all derivatives for which application is sought and thereafter when listed on MERJ Exchange.
2. For the purposes of these ARD, derivatives are financial instruments issued as securities with standard features whose value derives from and is dependent on the value of one or more other products (“underlying instrument”).
3. Convertible bonds do not fall within the scope of these ARD.
4. The Listing Committee may lay down additional requirements for the listing of specific types of derivatives.
See also:
- Directive Debt Securities Specific Structures
II. LISTING
A. Reference to the LR
Art. 3 Reference to the LR
LR8 to LR26 apply to Derivatives, with the exception of LR 11 (Previous Annual Financial Statements), LR12 (Auditors), LR 13 (Auditors Report), LR15 (Capital Resources), LR20 (Free Float), 25 (Listing in Home Country), applies except where contradictory or additional rules are provided below in Section A (i.e. “Listing Requirements”).
B. Listing Requirements
1. Issuer requirements
Art. 4 Previous Annual Financial Statements
The issuer must have produced annual financial statements that comply with the financial reporting standard applicable to the issuer for the most recent two (2) years proceeding the listing application pursuant to the relevant listing standard.
Art. 5 Capital resources
a) On the first day of trading, the issuer must report equity capital of at least USD 10million (or equivalent in another currency) in accordance with the issuer’s financial reporting standards.
b) If the issuer is a parent company with one or more subsidiaries, this requirement refers to the consolidated reported equity capital.
Art. 6 Mandatory Licensing
a) A Seychelles issuer of derivatives must be duly licensed as a securities dealer under the supervision of the Financial Services Authority of the Republic of Seychelles or a duly licensed bank under the supervision of the Central Bank of Seychelles.
b) In the case of a foreign issuer, the foreign issuer must be similarly licensed and regulated in a recognized jurisdiction.
c) Issuers that issue derivatives on their own equity securities or the equity securities of any group companies are exempt from this licensing requirement.
d) Rather than being fulfilled by the issuer, the licensing requirements in this Art. 5 may be fulfilled by any of the following:
i. a guarantor for the issuer provided that the guarantor and the issuer are fully consolidated within the same group of companies; or
ii. a company that belongs to the scope of consolidation of a guarantor organized under Seychelles law that is itself subject to Seychelles law; or
iii. a company that belongs to the scope of consolidation of a guarantor organized under the law of Seychelles or a recognized jurisdiction that is itself subject to the laws of that same recognized jurisdiction.
iv. The requirements under this Art. 5 are not obligatory in connection with the listing of shareholder or employee share options that entitle the holder to receive or purchase equity securities or depositary receipts of the issuer or any of its group companies.
See also:
Art. 7 Alternative fulfilment by the guarantor
The requirements laid down in LR10 (Duration) and Art. 5 (Capital Resources) may be waived if a third party (guarantor) that fulfils those requirements provides a guarantee commitment in respect of the obligations associated with the securities.
See also:
- Directive Guarantee Commitments
2. Requirements for securities
Art. 8 Applicable law
a) The Derivatives must be subject to Seychelles law or that of a recognized jurisdiction.
b) The issuer must provide for investor recourse in at least one jurisdiction including, at a minimum, the legal system applicable to the ETPs except.
Art. 9 Quality of securities
Only derivatives that constitute securities as defined in the Securities Act may be listed on MERJ Exchange.
See also:
Art. 10 Underlying instruments
Listing of derivatives is restricted to those that relate to underlying securities/instruments described in LR102 paragraphs a) iii. to ix. that have prices set regularly and are publicly accessible.
C. Listing Obligations
Art. 11 Reference to the LR
The listing obligations set out in LR27 to LR35 apply to the listing of derivatives except for any contradictory or additional provisions in this Section C.
Art. 12 Content of the Listing Particulars
The Listing Particulars must contain the information prescribed in Listing Particulars Scheme - Derivatives which constitutes an integral part of these ARD.
See also:
- Listing Particulars Scheme - Derivatives
Art. 13 Form of the Listing Particulars
a) The Listing Particulars may be provided in the following forms:
i. a single complete listing document for each individual issue (“stand-alone Listing Particulars”); or
ii. a complete listing document for each individual issue under a program registered in accordance with Art. 13 including a term sheet registered in accordance with para. c) i. (“MERJ Exchange registered issuance program”).
If the issuer chooses to produce stand-alone Listing Particulars in accordance with para. a) i., it must contain full information about the issuer and, where applicable, the guarantor as well as full details on the derivative that are required under the LRs, ARD and the Listing Particulars Scheme – Derivatives.
b) If the issuer chooses to submit Listing Particulars as part of a MERJ Exchange registered issuance program in accordance with para. a) ii. then all of the following conditions must be met:
i. the issuance program must contain all of the information about the issuer (and guarantor if applicable) required in the LRs, ARD and Listing Particulars Scheme - Derivatives as well as the general terms and conditions about the derivatives;
ii. the final term sheet must contain the rest of the information required by the LRs, ARD and Listing Particulars Scheme - Derivatives including definitive terms of the specific issue in question;
iii. both the issuance program and the final term sheet must state that the issuance program and final term sheet combined make up the complete Listing Particulars.
Art. 14 Registration of issuance programs
a) Where derivatives are to be issued and listed under an issuance program, the issuance program and sample final term sheet must be submitted in advance for approval and registration in accordance with the procedure laid down by the Listing Committee.
b) The Listing Committee will generally make a decision within 15 trading days which will thereafter be notified to the issuer.
c) A MERJ Exchange registered issuance program is valid for a period of 12 months and must thereafter be resubmitted a minimum of 15 trading days prior to the end of that period without any reminder to be reviewed where the issuer wishes to renew the program for another 12-month period.
d) Any amendments to the MERJ Exchange registered issuance program must be submitted to the Listing Committee in the form of an addendum for review and approval and any such addendum shall be deemed to form an integral part of the MERJ Exchange registered issuance program in question.
See also:
- Directive Procedures Debt Securities
Art. 15 Supplements
An issuer may submit and after approval publish a supplement in the form of an addendum relating to either a MERJ Exchange registered issuance program or a final term sheet.
Art. 16 Abridgement of/ Exemptions from Producing Listing Particulars
a) The Listing Particulars may be abridged where the listing concerns shareholder or employee share options relating to equity securities of the same issuer that are already listed on MERJ Exchange or a recognized exchange.
b) No Listing Particulars need to be produced in the following cases:
i. for the listing of put options in conjunction with a buy-back program that has been approved by MERJ Exchange and any other competent authority, provided the issuer is also the issuer of the related underlying instruments and they are being allocated to shareholders free of charge; and
ii. for the listing of shareholder options, provided these are issued by the issuer of the related underlying instruments and these are being allocated to shareholders free of charge.
See also:
- Listing Particulars Scheme – Derivatives
Art. 17 Incorporation by reference
In addition to the options regarding incorporation by reference provided in LR29 para. f), reference may also be made to the issuance programs as described in Art. 14
Art. 18 Official Notice
The provisions of LR32 do not apply to listings in accordance with these ARD.
Art. 19 Fulfilment by the guarantor
All of the obligations laid down by Art. 11 must be fulfilled by both the issuer and the guarantor and the Listing Particulars must also contain information about the guarantor.
D. Listing Procedure
Art. 20 Reference to the LR
The listing procedure provided in LR 36 to 45 governs a listing of derivatives except for any contradictory or additional provisions in this Section D.
See also:
- Directive Procedures Debt Securities
Art. 21 Submission of Listing Applications
a) Applications for the listing of derivatives may be submitted electronically by means of one of the means provided by MERJ Exchange.
b) It is possible to submit one listing application for all derivatives to be listed in the future. If this option is used, the issuer declaration must state that this applies to all derivatives to be listed in the future.
Art. 22 Fulfilment by the guarantor
The disclosure and procedural obligations laid down in LR39 and LR40 apply to both the issuer and any guarantor.
See also:
- Directive Guarantee Commitments
E. Provisional Admission to Trading
Art. 23 Requirements
a) In order for derivatives that are to be listed to be admitted provisionally to trading, the applicant must fulfil each of the following:
i. provide a description of the derivatives to be listed in the application for provisional admission to trading;
ii. give assurance that all of the listing requirements laid down in the LR and the ARD are fulfilled and the derivatives are structured in a way that has already been approved by the Listing Committee; and
iv. a listing application will follow.
b) The application for provisional admission to trading must be submitted via a medium specified by the Listing Committee in sufficient time prior to the desired first date of trading.
c) Derivatives from new issuers will not be granted approval for provisional admission to trading prior to the issuer itself being reviewed and approved by the Listing Committee.
d) Provided that the application for provisional admission to trading has been submitted in sufficient time, the requested date to commence provisional trading of the derivatives will generally be approved.
See also:
- Directive Procedures Debt Securities
Art. 24 New issuer
a) In the context of Art. 23 para. c) a new issuer is deemed to be one that at the time of application has never had derivatives provisionally admitted for trading or listed on MERJ Exchange.
b) An issuer shall not be considered a new issuer within the meaning of Art. 24 paragraph a) in the following cases:
i. the derivatives are guaranteed by a guarantor that acts as a guarantor of other derivatives already listed or provisionally admitted to trading or listed on MERJ Exchange; or
ii. there derivatives are guaranteed by a guarantor that has itself had derivatives listed or provisionally admitted to trading on MERJ Exchange; or
iii. an issuer of shareholder or employee share options that entitle the holder to receive or purchase equity securities or depositary receipts of the issuer or any of its group companies and that are listed on MERJ Exchange.
Art. 25 Time limit for provisional admission
a) The maximum time for which any derivatives may be traded under a provisional admission to trading is two months after which trading will be suspended until such time as the listing application is submitted and thereafter approved.
b) The applicant may be fined in circumstances where the listing application relating to the derivatives for which provisional admission to trading was sought is not submitted or if it is submitted but rejected on grounds that it has not fulfilled the listing requirements. In such cases the applicant may be further excluded from being able to submit any further applications for provisional admission to trading for a period of up to three years.
c) The sanctions provided for in para. b) may only be imposed where it is determined that the applicant’s conduct was judged to have breached important professional conduct obligations.
III. CONTINUING OBLIGATIONS
Art. 26 Reference to the LR
The conditions for maintaining listing provided in LR46 to LR55 with the exception of LR47 (Interim Report), LR50 (Corporate Calendar) and LR54 (Management Transactions).
Art. 27 Fulfilment by the guarantor
a) In principle the conditions for maintaining a listing of bonds subject to these ARD apply to both the issuer and the guarantor.
b) The obligation to publish price-sensitive facts in accordance with LR52 is that of the guarantor alone where the issuer is a subsidiary whose accounts are fully consolidated with the guarantor.
c) Application may be made for an exemption to the aforementioned requirements in this Art. 27 and the Listing Committee may grant such exemptions in cases where the issuer or the guarantor itself fulfils all listing requirements.
See also:
- Directive Guarantee Commitments
IV. SUSPENSION OF TRADING, TERMINATION AND DELISTING
Art. 28 Reference to the LR
The provisions in LR68 (Suspension of Trading) and LR69 (Delisting of Securities) apply to a listing of derivatives in accordance with these ARD except as modified by Art. 29.
See also:
Art. 29 Termination of listing
The listing of derivatives will be terminated automatically without prior notice by MERJ Exchange when the derivative expires.
V. SANCTIONS
Art. 30 Reference to the LR
Sanctions are governed by LR71 to LR73.
VI. APPEALS
Art. 31 Reference to the LR
Appeals against decisions made by the Listing Committee are governed by LR74to LR76.
VII. FEES
Art. 32 Reference to the LR
Fees applicable to issuers under these ARD are governed by LR77 to LR80.
See also:
- Listing Fees
VIII. FINAL PROVISIONS
Art. 33 Entry into force
These ARD enter into force on 1 January 2026.
Art. 34 Transitional provisions
Documentation which has been submitted previously to the Listing Committee for approval prior to these ARD coming into force will be reviewed and approved in accordance with provisions which have applied to date.
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