Qualified Investments Admission Rules
ITS admits to trading only those financial instruments which constitute Qualified Investments (QI) in the meaning of the AIFC Regulations and Rules. Shares, depository receipts, bonds, ETFs and other financial instruments may be recognized as QI.
QI may be admitted to trading on ITS on the following grounds:
- On the initiative of ITS at its own discretion.
- At the request of an ITS trading participant. To initiate admission to trading on ITS, a trading participant needs to submit an application to ITS and pay the admission fee, if admission request is approved by ITS.
In both cases prior approval by the AFSA is necessary. A QI issuer has no obligations to ITS and is not required to disclose any information as a result of admission to trading on ITS. Disclosure obligations are assumed by ITS.
Admission to trading requires:
- Recognition as a Qualified Investment and approval by the regulator,
- Compliance with requirements of the ITS Admission Rules including:
- ISIN and CFI codes,
- Eligible security type,
- listing on a recognized foreign exchange,
- disclosure of information by the issuer as required by the foreign trading venue, etc.
Trading termination
ITS may cease trading in a particular QI for a number of reasons.. Generally, termination of trading by ITS follows cancelation of the securities by the issuer, typically as a result of a corporate action completed by the issuer. In case of mergers and acquisitions shareholders of the target company are entitled to receive a consideration for the canceled securities in the form of cash and/or shares of the acquiring company, depending on the terms of the corporate event.
The most common reasons for QI trading termination by ITS:
- Termination of the issuer's activities as a result of its reorganization or liquidation.
- Redemption (cancellation) of an issue of securities, including as a result of their conversion.
- Delisting of the securities by the recognized foreign exchange, either voluntary (at request of the issuer), or due to a failure to comply with the continuous requirements of the recognised foreign exchange (e.g. failure to disclose material information, bankruptcy filing, price below minimum level, etc.) and inability to regain compliance within a provided cure period, if any.
ITS welcomes suggestions by trading members regarding expansion of the QIs list and evaluates every request for admission of securities to trading on ITS.