Having transparency, high standards of reporting, and using the jurisdiction of English law, the Astana International Financial Center (AIFC) is a great platform for attracting investments in Central Asia. In this article, we would like to discuss the Astana International Exchange (AIX) and Exchange Traded Notes (ETN) financial instrument placement on it. The AIX exchange was established in 2017 and was designed to provide clear and favorable conditions for attracting local and foreign investors, as well as creating a platform for the growth of private business financing and the whole economy. Listing of various securities is allowed on the AIX platform, including shares (Equity), bonds (Debt) and fund units (Units).
Exchange-Traded Notes (ETN) listing on AIX
Exchange-Traded Notes listing on AIX
Meanwhile, ETN is an unsecured and unsubordinated debt instrument issued by a bank or other financial institution. At the same time, ETN income is tied to one of the stock indices or another benchmark (or to a set of benchmarks), for example, to the prices of oil and precious metals to the indices of developing countries .
According to the AIX definition, debt security is an instrument that creates or recognizes debt, whether or not it is backed. Thus, ETN in the understanding of AIX is clearly a debt instrument.
The AIX sets out the following basic requirements for ETN issuers:
- Conducting an audit of annual financial statements covering the previous 2 years.
If the period of the audited annual financial statements is:
- not later than 9 months on the proposed listing date- in such a case, additional financial statements are not required;
- later than 9 months but not later than 15 months on the expected listing date- audited interim financial statements must cover at least the first 6-month period;
- later than 15 months but not later than 18 months on the expected listing date – audited interim financial statements must cover at least the first 6-month period.
- At the time of listing, the relevant minimum market capitalization level must be at least US $500,000.
In AIX the creation of a Special Purpose Company practice is applied, then this company issues ETN.
As can be seen from the above table, as of May 14, 2022, no other private company has issued ETN except FM Limited, an affiliate of the AIX exchange. However, these examples show that if the above requirements are met and the relevant documents are provided, it is possible to register SPC, issue and list ETN on the AIX exchange.
At the same time, we note the need to provide the following documents to start the procedure for listing bonds on the AIX site:
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