Alternative financing platform for businesses

The staff of the South Pacific Stock Exchange in their reception area office in Suva. Picture: RAMA/FILE

Fijian businesses now have an alternative financing platform after the implementation of the Listing and Trading Rule Book for wholesale corporate bonds, and the launch of the newly formed subsidiary company, SPX Trustees Ltd (SPXT).

South Pacific Stock Exchange (SPX) acting chief executive officer Pretesh Prasad said “after the announcement of various tax incentives by the Fijian Government to encourage the issuance and listing of wholesale corporate bonds, SPX with technical assistance from International Finance Corporation (IFC) vigorously pursued this initiative and undertook a substantial amount of work to formulate the Listing and Trading Rule Book and ensure the establishment of SPXT, which now lays the foundation for the issuance and listing of wholesale corporate bonds on the SPX platform.

“In essence, this is a huge stride made by SPX and a great achievement for the entire capital market in Fiji as this initiative not only enhances the operational dynamics of the SPX group but it will help develop a more vibrant stock market in Fiji by offering investors an opportunity to invest in a wider range of assets while simultaneously offering companies an alternative platform to raise capital,” Mr Prasad said.

He thanked the Fijian Government for its continued stance on maintaining a favourable regulatory regime allowing SPX to make progress towards such transformational initiatives and also acknowledged the technical assistance offered by IFC in this development. According to the SPX the Listing and Trading Rule Book lays out the rules and procedures of SPX that apply to companies wanting to issue and list their wholesale corporate bonds on the SPX platform under the Companies (Wholesale Corporate Bonds) Regulations 2021.

The corporate bonds regulation was issued by the Reserve Bank of Fiji (RBF) earlier in 2021 and provides guidance to businesses wishing to raise funds through the issuance of corporate bonds to eligible wholesale investors while also ensuring there is significant transparency before and after the bonds are issued to limit risks to investors.

“Developing Fiji’s capital market can help improve access to long-term finance that will strengthen the private sector, which will lead to job creation and a sustainable recovery from the impacts of the COVID-19 pandemic,” said Deva De Silva, IFC Resident Representative in Fiji, Kiribati, Samoa, Tonga and Tuvalu. SPXT has been approved by the RBF to undertake the function of a Trustee in relation to borrowers that conduct bond issuances under the Companies (Wholesale Corporate Bonds) Regulations 2021.

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