Euronext Growth Oslo named “Designated Exchange” in Bermuda | Conyers
Euronext Growth Oslo has been named a “Designated Exchange” for the purposes of the Bermuda Companies Act 1981 (the “Companys Act”). The appointment decree was signed by the Minister of Finance on September 7, 2021. The appointment will benefit Bermuda incorporated companies seeking to raise capital in the Norwegian capital markets.
Euronext Growth Oslo has been designated as a ‘designated stock exchange’ for the purposes of the Companies Act. The appointment decree was signed by the Minister of Finance on September 7, 2021. The appointment will benefit Bermuda companies seeking to raise capital in the Norwegian capital markets.
Euronext Growth Oslo was established in January 2016 under the name Merkur Market and is operated by Oslo Børs. Euronext Growth Oslo is a multilateral trading platform primarily aimed at small and mid-cap growth companies to reach a wide range of investors. Oslo Børs also operates the Oslo Stock Exchange and the Euronext Expand (formerly known as the Oslo Axess) which are both also “designated exchanges” under the Companies Act.
As of April 2021, 19 Bermuda companies were listed on the Oslo Stock Exchange and Euronext Expand, representing a market capitalization of over $ 10 billion. Following the appointment of Euronext Growth Oslo Bermuda, companies will also be able to use the fast growing stock exchange listing to access Norwegian capital markets. The appointment of Euronext Growth Oslo should be good news for Bermuda-incorporated shipping holding companies, as Oslo is the largest shipping securities market in Europe and second globally. Oslo is also the second largest market in Europe for energy companies and the second largest in the world for companies in the oil service sector.
Companies whose shares are listed on a “designated stock exchange” are exempt from certain requirements and can take advantage of certain provisions of the Companies Act to facilitate the listing and trading of their shares and to avoid double regulation.
Generally, Bermuda companies offering their shares to the public are required to comply with prospectus requirements under the Companies Act, and must publish a prospectus and file it with the Registrar of Companies. However, companies whose shares are listed on a “designated stock exchange” are excluded from this requirement if (i) the rules of the designated stock exchange do not require the company to publish and file a prospectus, or (ii) the designated stock exchange has received or otherwise accepted a prospectus or document in connection with the share offering. It should also be noted that following the changes to the Companies Act in 2020, the prospectus requirements no longer apply to exempt companies (being the majority of listed companies incorporated in Bermuda), and now only apply to local companies.
The Companies Act also contains provisions to facilitate the listing and trading of shares on a “designated stock exchange”, such as (i) allowing the company to maintain a register of branches of members outside Bermuda after giving written notice to the registrar of
Companies of the address where this branch register is to be kept; and (ii) that all shares may be transferred in accordance with the rules or regulations of the “designated stock exchange”.
A company listed on a designated stock exchange may avail itself of certain provisions, including: (i) record keeping in Bermuda allowing directors or a resident representative to verify with reasonable accuracy the financial position of the company at the end of each six one-month period rather than the usual three-month period; (ii) instead of sending the financial statements of the company to each shareholder, the company may send summary financial statements, provided that the complete financial statements are available for public consultation at the registered office of the company in Bermuda; and (iii) be exempt from the requirement under the Companies Act to maintain the register of beneficial owners and related provisions.
In addition, Bermuda companies which have one of their “equity securities” (that is, a share which entitles its holder to vote or appoint one or more directors or a security convertible into such a share ) listed on a “designated stock exchange” are also able to benefit from general authorization from the Bermuda Monetary Authority. This general authorization provides for the free issue and transfer of any securities of the company to and from non-residents of Bermuda, without further reference to the BMA and as long as such securities are so listed.