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The Emerging Companies Market Of The Cyrpus Stock Exchange

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The E.C.M is considered as a Multilateral Trading Facility (MTF) according to “the provision of Investment Services, the exercise of Investment Activities, the Operation of Regulated Markets and other Related Matters” Law 144(I)/ 2007. The E.C.M. operates according to the Regulative Decisions adopted by the Cyprus Stock Exchange (“CSE”). It is addressed to unlisted companies seeking to raise finance and seeking access to an unregulated market or to listed companies who are not willing or able to undertake the higher costs of remaining in a regulated market. The ECM is characterized as unregulated and therefore it does not come under the mandatory provisions for regulated markets which impose strict listing requirements and continuous obligations.

The Securities and Exchange Commission supervises the issuers regarding the publication of a prospectus, if required. In addition the Securities and Exchange Commission supervises the CSE as a market operator which operates a Multilateral Trading Facility (MTF).

It is to be noted that shares, corporate bonds and the derivatives of these titles such as Warrants, Rights, and Convertible Bonds are traded in the ECM. Corporate Bonds are traded in their own market which is called “Emerging Companies Bond Market”.

Trading on the ECM will offer the following advantages for companies:

·         It is an alternative method for securing finance completive cost.

·         It promotes the recognition and reputation of companies.

·         It prepares companies for future listing to a regulated market.



The company which seeks listing must appoint a Nominated Advisor throughout the floatation procedure.

The company must have published audited accounts and it must have been in operation for at least two years prior to submitting its application to the CSE. Newly established companies will be able to if the CSE council judges that potential shareholders are given satisfactory information that would allow them to access properly the value of the titles, from the Nominated Advisor of the company.

The company must be properly established and operating and must be a public company pursuant to the laws of the country of its incorporation, which provides to the company with the power to issue shares to the public.

The company must be authorized to issue the specific shares which it seeks to float in pursuance to the laws of the country of incorporation, the memorandum and articles of association or any other document governing the terms of its incorporation and relations among its members.

The company is proposing the flotation of freely transferable securities.

The company shall not undertake any commitment in any way incompatible with the interests of its shareholders.

Equal treatment must be secured to the beneficiaries of the securities of the same category in respect of all rights or obligations related thereto.

In the case of shares, it must be ensured that any future issue shall first be offered to existing shareholders pro rata according to the amount each holds in the issuer’s share capital unless the shareholders shall decide otherwise by special resolution.

Fully paid securities shall be proposed for floatation.

The listing must concern all the securities of the same category which have, or will be, issued, as well as all options or other derivatives which are convertible or offer the possibility of being converted into securities in the same category as the securities to be floated.

The company must be prepared and able to deliver its register to the Central Depository and Registry and to respond to any obligations upon the undertaking or the future keeping of the register of its shareholders. 



Either by public offer, which requires a Prospectus and an approval from the Securities and Exchange Commission or by private placement, which requires only an Admission Document to be submitted to the CSE.  A combination of both methods is possible as well. 



If the offer to the public is up to € 2,500.000 (two million five hundred thousand Euros) there is no need to issue a prospectus.

If the offer is public is greater than €2,500.000 million Euros and is addressed to over 100 shareholders, a Prospectus and an approval from the Securities and Exchange Commission will be required. 

In a different case (by private placement), where the offer is addressed to institutional investors (strategic or other) or to fewer than 100 shareholders and less than € 2,500.000, an Admission Document is to be submitted to the CSE without any requirement for approval by the Securities and Exchange Commission.



Listed companies must publish annual audited accounts four months after the end of the financial year and also semi – annual accounts two months after the end of the half-year period.

Any changes regarding the Nominated advisors must be announced.

In order to ensure the early notification to the investors, listed companies  have the obligation to announce to the Cyprus Stock Exchange immediately and at least one hour before trading begins any decision relating to the following matters:

  • Any decision of the Board of Directors relating to the payment or not of                a dividend, the distribution of profits or the payment      interest   concerning       listed securities.
  •  Audited accounts, including the notes of the accounts
  • In the case of bonds any decision taken for a new issue.
  • Any decision taken concerning acquisition or liquidation of assets.
  • Any decision taken concerning changes in the capital structure of the company.
  • Any changes in the positions of Chairman, Member of the Board of Directors, Senior Management, the Auditors or any other executive.
  • Publication and submission to the CSE of the dispersion statement of the share capital at the last working day of the year.