Seychelles gets ready to open its stock exchange |26 October 2012

  
Mr Brantley addressing the audience during the presentation yesterday

Enthusiasm extended beyond the borders of Seychelles yesterday morning at the Seychelles Trading Company’s (STC) conference centre when representatives of Trop-X (Seychelles) Ltd gave a presentation aimed at increasing the understanding of what a securities exchange is and the role and structure of the exchange and its associated companies.

Central Bank Seychelles (CBS) governor Caroline Abel said that with the deepening of the country’s financial market, a securities exchange can play an integral role in the overall infrastructure of the financial system and the economy as a whole.

“Among other functions, securities exchanges provide a regulated platform for companies to list securities and raise capital,” said Ms Abel

She added that the CBS and the Seychelles government fully support this private initiative and we look forward to see the development of this new segment of the country’s financial system along with the benefits that it can provide.

“Government as a shareholder in several private companies in Seychelles intends to support this initiative by listing some of those in which it holds a majority stakes and encourage others in which it holds minority stakes to list as well,” said Ms Abel, who commended the work done so far by the Seychelles International Business Authority (Siba), Trop-X (Seychelles) Ltd and other supporting companies.

Yesterday’s gathering also enabled local professional service delegates such as lawyers and accountants to gain a better understanding of opportunities to provide services to the exchange.
The presentation also elaborated on the benefits that a shareholder will enjoy through their company’s listing on the exchange.

“Right now there’s no mechanism for companies to raise capitals to start or expand their business. Your only options right now are you go to a bank, your friends, family or a wealthy businessman to borrow money. This is a very time consuming exercise. With the stock exchange, you can look to try to raise money from a broader universe of investors – both locally and international – through brokers. The stock exchange will help increase the profits of companies, create more jobs, and overall grow the economy of Seychelles, said Trop-X operations and finance director Bobby Brantley.

Before being listed on the exchange, companies will have to go through a sponsor advisor where they will learn of the advantages and disadvantages of being listed, the benefits and costs. It’s only after that that companies can list on the exchange.

“As an exchange we don’t really get involved in this process. As long as a company meets the listing requirements we are happy for them to list. We are not looking to see if the company is viable or agree with its business plan. This is something the investors will ultimately decide. Our role is setting the minimum requirements and regulating the trading of the shares, and not deciding whether a company is viable,” added Mr Brantley.

He noted that Seychelles stands to benefit a lot from the exchange through fees earned by banks, insurance companies, lawyers and everybody around the exchange. The companies themselves have the benefit of access to capital at a more attractive rate.

“We’ve looked at other exchanges in the region including Mauritius and Johannesburg, and our fees for the exchange are substantially less. Our exchange fees are about one third less than that of Mauritius. This is a benefit to the companies because they want their shares to trade,” said Mr Brantley, one of the founders of Trop-X and former managing director of Sterling Offshore, Limited, a successful financial services firm which he co-founded five years ago and which holds multiple licenses in Seychelles.

Nicko Ackerman representing the auditing firm Grant Thornton, Ed Tuohy from AfricaClear and Afri Dep, and Peter Jardine, director of Constant Capital, answered the many questions raised by the audience.

There will be three boards on which companies may list; these include the Venture Capital Board, the Small and Medium Enterprise Board, and the Main Company Board.
AfriClear is the Trop-X-appointed clearing agency responsible for settling trades conducted through Trop-X. AfriClear will liaise with stock brokers and their custodian banks to ensure that all trades are completed within the allotted timeframes.

AfriDep is the securities depository appointed by Trop-X. It will hold and maintain registers for all of the dematerialised securities traded on Trop-X.

A sponsor advisor is a company approved by Trop-X to provide advice, representation and services to companies looking to list on the exchange. The sponsor advisor manages the admission of new companies on Trop-X and remains as the advisor to help ensure compliance with the ongoing listing obligations of the company. Typically the sponsor advisor will be an investment bank, corporate, finance advisory services firm, accounting firm or stock broker.