I. Eligibility Requirements
MERJ DEP provides services to underwrite the eligibility of equities, corporate and government debt securities (“Securities”), both existing and proposed to be issued, which are intended for listing and trading on any market operated by an Approved Listing Market Operator (e.g. MERJ Exchange including Upstream).
Initial Public Offerings (IPO) and Follow-on Public Offerings (FPO) of Securities that have been approved by MERJ DEP are able to be distributed quickly and economically by electronic book-entry delivery and settlement through MERJ DEP. After this time, they are eligible for MERJ DEP’s full range of Securities Facility Services and secondary market trading on MERJ Exchange.
Where MERJ Depository Interests (MDIs) are being created over the underlying Securities, the eligibility of the underlying Securities must be assessed and approved as Eligible Securities pursuant to these Eligibility Requirements.
In order to qualify for MERJ DEPs services, the following requirements must be met at a minimum:
- All previous issues and any planned issues of the relevant Securities must be in accordance with applicable law where issued and offered.
- The Securities or MDIs created over them must be capable of being delivered by electronic means (i.e. book entry or DLT platform) in accordance with MERJ DEP’s Securities Facility Rules (i.e. it must be demonstrated that there are no impediments in applicable law of the issuer such as company laws, securities laws, stamp duty or similar).
- The Securities must not be subject to any restrictions on foreign ownership.
- For equity securities, the Issuer must –
- have a regulated Transfer Agent or Registrar domiciled in its jurisdiction appointed;
- be using a cap table management system approved by MERJ DEP; or
- appoint MERJ DEP to maintain the Principal Register (subject to this being permissible by applicable law as confirmed pursuant to a legal opinion).
Definitions
The following terms have the meanings assigned to them for the purposes of this document:
“Agent” means an Issuer’s auction agent, custodian, depositary, dividend reinvestment plan administrator, exchange agent, issuing and/or paying agent, redemption agent, remarketing agent, registrar, tender agent, transfer agent, trustee, trust company, and/or any other person or entity acting in an agency capacity on behalf of Issuer.
“Eligible Securities”, as used in this document, are Eligible Assets for the purposes of the MERJ DEP Rules.
“Securities” as used in this document has the meaning provided in the MERJ DEP Rules.
II. Submission of an Eligibility Application to MERJ DEP
An Issuer or its Agent may submit an eligibility application to MERJ DEP prior to new Securities initially being offered and distributed using MERJ DEP’s services (“New Issue”) or in sufficient time prior (i.e. factoring a listing time table) for already issued and outstanding Securities (“Existing Issue”).
The Issuer or its Agent must provide an eligibility application for specified Securities to MERJ DEP by the submission of the appropriate questionnaire specified in this document, and all related offering documents, at a minimum, to be considered for full-service eligibility at MERJ DEP. Additional documents and information may be required as part of the eligibility review.
It is the responsibility of the Issuer or its Agent requesting eligibility for the securities to provide evidence that the securities satisfy MERJ’s Eligibility Requirements. Once MERJ DEP has reviewed the information provided, it will advise the Issuer or its Agent whether an opinion of counsel to the Issuer is also required to substantiate the legal basis for eligibility. For Securities of Issuers domiciled outside Seychelles that are not already listed on a “Recognized Overseas Securities Exchange” or a Listing Market Operator that is a member of the World Federation of Exchanges, this will ordinarily be required.
MERJ DEP expects, among other things, any such opinion to be provided by an experienced securities practitioner, who is licensed to practice law in the relevant jurisdiction and in good standing in any bar to which such practitioner is admitted. Such counsel must be engaged in an independent private practice (i.e. not in-house counsel) and may not have a beneficial ownership interest in the security for which the opinion is being provided or be an officer, director or employee of the Issuer. MERJ DEP reserves the absolute discretion to approve or reject the counsel issuing the opinion which is being delivered to MERJ DEP.
An Underwriter that is a Participant of MERJ CLEAR or with an approved correspondent relationship with a Participant of MERJ CLEAR may also request MERJ DEP eligibility for new Securities being offered and distributed.
New Issues
A “New Issue Eligibility Questionnaire” must be submitted with the eligibility application in case of new Securities to be issued pursuant to an IPO or FPO. To submit this questionnaire, the Issuer must be already listed on MERJ Exchange or planning to list on MERJ Exchange in conjunction with the New Issue.
Existing Issues
An “Existing Issue Eligibility Questionnaire” must be submitted with the eligibility application in case of previously issued Securities along with a copy of the Principle Register with an attestation of this register by the Transfer Agent/Registrar or where one has not been appointed then the CEO. To submit this questionnaire, the Issuer must be planning to list on MERJ Exchange.
III. Eligibility Review
About the Service
MERJ DEP reviews eligibility requests of Issuers that have previously issued and distributed equity, corporate and government securities outside of MERJ DEP (“Existing Issue Eligibility Application”).
How the Service Works
The review process includes:
- Examining certificates (where applicable)
- Examining the cap table
- Validating the CUSIP/ISIN number (i.e. CUSIP via Standard & Poor’s and ISIN via ANNA databases)
- Contacting the Transfer Agent to verify transferability of the issue
- Reviewing the legal opinion (if applicable)
- Payment information
- Fees, if applicable
Resources
New Issue Eligibility Questionnaire
Existing Issue Eligibility Questionnaire
Securities Facility Agreement (MDIs)
Form of Legal Opinion (Foreign Issuers)