Corporate Law Update: The Atlantic Securities Market – A New Opportunity?
25 April 2016
The Atlantic Securities Market is a new opportunity for companies seeking a dual listing in the US and Ireland. The first market of its kind in Europe, it enables investors to trade in euro and dollar denominated securities in a regulatory regime which has been streamlined to align with NYSE and NASDAQ.
The Irish Stock Exchange (“ISE”) has created a new market which will appeal to companies seeking a dual listing in the US and Ireland. The Atlantic Securities Market (“ASM”) introduces a market to Europe which allows for a regime streamlined to align with the US markets.
Ireland’s Capital Market
Ireland has one of the most open economies in the world. Although a small economy, its capital markets have enjoyed considerable integration with markets both in the EU and globally.
Traditionally, the Irish and UK markets had strong interactions for economic and political purposes. Recently, these interactions have been superseded by newer relationships in the EU and the globally dominant US market.
Establishment of the Atlantic Securities Market
Building on the development of these international relationships, the ISE launched a new market, the ASM, in October 2015. The ASM is a market which aligns the Irish market with the US markets from both a regulatory and trading perspective. It facilitates a dual quotation for an issuer's equity on NYSE/NASDAQ and ASM. The intention behind its establishment is to make the ISE an attractive market for companies who want to access capital from both sides of the Atlantic.
The Benefits of Listing on the ASM
The ASM enables companies to easily operate a dual US/European listing. It is the first market of its kind in Europe and enables investors to trade in euro and dollar denominated securities.
The ASM is a multilateral trading facility and not a regulated market for prospectus, transparency and market abuse purposes.
The ISE has endeavoured to streamline the registration and regulatory regime in the following ways:
- companies can use their Securities and Exchange Commission ("SEC") registration document to join the ASM with a limited number of additional disclosures;
- companies can use US GAAP for financial reporting;
- listing provides a solution for companies that are “foreign private issuers” and “foreign issuers” for US purposes;
- continuing obligations are aligned to the SEC;
- stamp duty free trading in most cases;
- shareholder approval is not required for major transactions other than reverse takeovers or fundamental changes of business.
The Response So Far
To date, the ISE has not received any applications for listing on the ASM. The reasons for this may be down to the fact that: (1) it is a relatively new market; and (2) there was a decrease in investor confidence in Europe during the beginning of 2016.
The ASM is a new opportunity for US listed companies seeking a streamlined dual European listing, as well as US companies with operations already based in Ireland.
Although a “light-touch” option in terms of regulation, issuers should be aware that the market abuse regime is changing and will eventually apply to this type of market. This may affect an issuer’s decision in terms of applying for a dual listing.
However, the ASM creates scope for increased opportunities for companies in terms of expanding their investor base and enhancing their visibility amongst European stakeholders. Should investor confidence in Europe increase to its previous levels, the ASM is an attractive option for issuers seeking liquidity on both sides of the Atlantic.
For further information on the application process or the ASM generally, please contact a member of our Equity Capital Markets Team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.