Additional Rules (ETP)
I. PURPOSE AND SCOPE
Art. 1 Purpose
The purpose of these Additional Rules for Exchange Traded Products (ARETP) is to specify the necessary information to enable investors to evaluate the characteristics of ETPs 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
a) These Additional Rules apply to ETPs, defined as collateralized, non-interest-bearing debt securities with the following characteristics:
i. Issued as securities,
ii. Continuously offered and redeemed in a fixed structure and denomination,
iii. Designed to replicate the performance of one or more specified underlying instruments directly or with leverage (e.g., tracker certificates).
b) These Additional Rules do not apply to investment entities issuing equity securities, which are covered under the Investment Entities section of the Listing Rules. ETPs are not considered mutual funds and are, therefore, not regulated as such under the Mutual Funds and Hedge Funds Act 2008, as amended.
See also:
- Mutual Funds and Hedge Funds Act 2008 as amended
II. LISTING
A. Reference to the LR
Art. 3 Reference to the LR
LR8 to LR26 apply to Exchange Traded Products (ETPs), with the exception of LR12 (Auditors), LR13 (Auditor’s Report), LR15 (Capital Resources), LR20 (Free Float), LR25 (Listing in Home Country) except where there are contradictory or additional provisions are set out in this section.
B. Listing Requirements
1. Issuer requirements
Art. 4 Duration
LR10 (Duration) does not apply if the ETPs are collateralized per Art. 10 para. a) or if a guarantor provides a guarantee.
Art. 5 Capital Resources
a) Except where the outstanding ETPs are collateralized in accordance with Art. 10 para. a) on the first day of trading, the issuer must report equity capital of at least USD 10 million (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.
c) Paragraphs a) and b) do not apply if the ETPs are collateralized Art. 10 para. a), or if a guarantor provides a guarantee.
Art. 6 Annual Financial Statements
Where the issuer does not meet the requirements of LR10 (Duration), but where the issuer otherwise meets these Additional Rules Exchange Traded Products, the issuer need only provide the available annual financial statements according to the accounting standard of the company.
See also:
- Directive Guarantee Commitments
- Directive Financial Reporting
2. Requirements for securities
Art. 7 Applicable Law
a) The ETPs 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.
Art. 8 Requirements for ETPs without a Final Due Date
a) For ETPs with an open-ended term (no fixed maturity), the product terms must include:
i. An individual redemption right for holders of the ETP, and
ii. A termination right for the issuer.
b) The issuer’s termination right must specifically allow for the termination and redemption of the ETP if it fails to continuously meet the applicable listing requirements during its term.
Art. 9 Underlying instruments
a) Listing of ETPs is restricted to those that relate to underlying securities/instruments described in LR103 paragraphs a) ii. to x. and xii. that have prices set regularly and are publicly accessible.
b) The Listing Committee may permit further underlying instruments.
Art. 10 Collateralization
a) ETPs are collateralized as follows:
i. by presenting the underlying instrument or a futures contract of same for deposit; or
ii. for virtual assets, but presenting a claim for surrender of the underlying instrument; or
iii. liquid equities, participation certificates, profit-sharing certificates, collective investment schemes, bonds or commodities that are listed or admitted to trading on MERJ Exchange or another recognized exchange; or
iv. by means of a cash balance or precious metals.
b) The collateral at any given time must cover at least the amount representing the balance of all of the ETP’s outstanding.
c) The collateralized assets must be held in safekeeping by a third party that is appointed by the Issuer, deemed acceptable by the Listing Committee in accordance with LR88.
C. Listing Obligations
Art. 11 Reference to the LR
The listing obligations set out in LR27 to LR35 applies to the listing of ETPs except where additional or contradictory provisions are outlined in this Section C.
Art. 12 Content of the Listing Particulars
a) The Listing Particulars for ETPs must include the information required by the Listing Particulars Scheme – ETP, which is considered an integral part of these Additional Rules Exchange Traded Products.
b) If the ETP terms are governed by non-Seychelles law, this fact must be disclosed prominently on the front cover of the Listing Particulars. For issuance programs, this requirement applies to the final term sheet .
See also:
- Listing Particulars Scheme - ETP
Art. 13 Listing Particulars
a) In derogation of LR29 (Form of the Listing Particulars), 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 paragraph c) (“MERJ registered issuance program”).
b) 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 the guarantor, if applicable, as well as full details on the ETP that are required under the LRs, Additional Rules Exchange Traded Products and the Listing Particulars Scheme - ETPs.
c) If the issuer chooses to submit Listing Particulars as part of a MERJ 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/or guarantor as applicable required in the LRs, Additional Rules Exchange Traded Products and Listing Particulars Scheme - ETP as well as the general terms and conditions about the ETPs;
ii. the final supplement document (e.g. Product Supplement) must contain the rest of the information required by the LRs, Additional Rules Exchange Traded Products and Listing Particulars Scheme - ETP including definitive terms of the specific issue in question;
ii. both the issuance program and the final supplement document must state that the issuance program and final term sheet combined make up the complete Listing Particulars.
See also:
- Directive Procedures Exchange Traded Products
Art. 14 Compliance Declaration
a) The issuer must include a written declaration with its application confirming that either it or its guarantor is a bank, insurance company or similar foreign financial institution licensed in Seychelles or a recognised jurisdiction or that the underlying instruments are collateralised pursuant to these Additional Rules Exchange Traded Products; and
b) If applicable that the custodian holding any virtual assets serving as collateral qualifies as a custodian pursuant to the requirements of LR88; and
c) If applicable that the virtual assets are being maintained and allocated in accordance with the requirements of LR 88 with the collateral available at all times within the meaning of LR88.
Art. 15 Incorporation by reference
In addition to the options regarding incorporation by reference provided in LR 29 para. f) may also be made to the issuance programs.
Art. 16 Fulfilment by the guarantor
Both the issuer and any guarantor must fulfil all of the obligations incumbent upon them.
Art. 17 Market making
a) The issuer must provide an undertaking to MERJ Exchange that it will at all times ensure that a market exists for the ETPs in question by making suitable arrangements for at least one market maker.
b) MERJ Exchange may issue implementing provisions with regard to market making.
III. CONTINUING OBLIGATIONS
Art. 18 Periodic reporting
a) LR47 (Interim Report) is not required to maintain a listing of an ETP.
b) The total fees collected by the issuer or as a percentage of the Net Asset Value by or on behalf of the issuer in relation to the listed ETPs during the course of the year must be notified to the market by way of an Official Notice at the same time the Annual Report is published. The Listing Committee may issue further provisions concerning the calculation of the NAV.
Art. 19 Corporate Calendar
LR50 (Corporate Calendar) is not required to maintain a listing of an ETP.
Art. 20 Other ongoing reporting obligations
To maintain the listing of ETPs, issuers must adhere to the prescribed regular reporting obligations for ETPs.
See also:
- Directive Regular Reporting Obligations
Art. 21 Form of the reports
a) For certain standardized reporting obligations, MERJ Exchange may create standardized forms in paper or electronic form for use by issuers.
b) Reporting must at least include the issuer, the securities involved and the name, telephone number and email address of the person submitting the report. The report must also make it clear which reportable fact is being addressed.
Art. 22 Publication in accordance with terms and conditions
Where a publication is a result of a requirement in the terms and conditions of the ETP in question, then the details of the publication must be in accordance with the terms and conditions provided in the Listing Particulars.
Art. 23 Official Notices
a) Any reportable fact which must be disseminated by an Official Notice must be submitted to the MERJ Listing Division in accordance with the requirements specified in the relevant directive. An Official Notice does not substitute any mandatory publication of an ad-hoc notice.
b) In urgent cases requests should be supported by direct contact to the Listing Division.
c) The MERJ Listing Division may offer alternative methods of reporting Official Notices including via the web or a web-based application.
d) The Official Notice must be submitted as a text document without formatting (i.e. using Microsoft Notepad or similar).
e) The Official Notice will be disseminated as is. The issuer bears full responsibility of the content of the Official Notice.
f) The “Official Notices” are generally published by MERJ via one or more of the following methods:
i. messaging function of any MERJ trading application;
ii. email sent to interested recipients; or
iii. MERJ website.
Art. 24 Publication and dissemination by MERJ Regulation
a) MERJ Regulation may process data submitted by issuers and may further publish or disseminate such data via the internet or other media.
b) Where the issuer submits any information which at the time of submission is to be treated confidentially or the publication of which is meant to be deferred, the communication must be clearly marked “Confidential” or “Publication deferred pending consultation” or similar. In addition, the desired date and time of the publication must be specified. Failing the issuer following these procedures MERJ Exchange cannot guarantee the confidential treatment of the information.
Art. 25 Fulfilment by the guarantor
The conditions for maintaining the listing of ETPs must be met by both the issuer and the guarantor.
Art. 26 Sponsor Advisors
An issuer of ETPs which has at least one person with signing authority that demonstrates adequate knowledge of applicable laws, listing rules and ongoing disclosure and reporting requirements required of the Issuer is not required to maintain a Sponsor Advisor
IV. SUSPENSION OF TRADING, TERMINATION AND DELISTING
Art. 27 Suspension of Trading
a) The Listing Committee may temporarily suspend trading in ETPs at the request of the issuer or on its own initiative if listing requirements that must be met continuously during the term are no longer fulfilled, in particular if the custodian loses the authorization required pursuant to Art. 14 para. b).
Art. 28 Termination of Listing
MERJ will ordinarily terminate the listing without prior notice when the ETP expires.
V. FINAL PROVISIONS
Art. 29 Entry into force
These Additional Rules Exchange Traded Products enter into force on 1 January 2026.
Art. 30 Transitional provisions
a) Documentation which has been submitted previously to the Listing Committee for approval prior to these Additional Rules Exchange Traded Products coming into force will be reviewed and approved in accordance with provisions which have applied to date.
b) Any documents that cease to be valid after 31 December 2025 must be replaced and resubmitted with documents in accordance with these Additional Rules Exchange Traded Products.