REMS | AIX

Regional Equity Market Segment (REMS)

In July 2020, the Astana International Exchange launched a new Regional Equity Market Segment (REMS), offering midsize companies in Kazakhstan and Central Asia easier access to public equity finance.

The new segment’s goal is to support growing companies with less available capitalisation rather than larger national companies, allowing them to list using a simplified procedure that does not require extensive prospectuses or the disclosure of audited financials for long periods, resulting in fewer time and financial costs.

“The economic downturn caused by the COVID-19 pandemic will impact all businesses and result in a need for more investment from foreign and domestic investors. Thus, there will be more midsize businesses looking for simple and cost-effective ways to raise capital. A REMS listing provides Kazakhstan businesses with this option. Today, more than ever before, it is important for Kazakhstan to set up conditions for an efficiently operating exchange that can raise capital for businesses to help resume and support their operations, restore jobs and help the country’s economy as a whole, ”- Tim Bennett, AIX Chairman of the Board.

The REMS enables midsize businesses to raise capital by listing on the AIX on more flexible terms than on the main market, and:

Is better suited for smaller companies and their potential investors.
Encourages an ecosystem for local businesses to raise capital.
Fosters greater interest from foreign and regional investors to ensure a dynamic and more liquid marketplace.
Reduces the administrative burden for potential issuers.
Is an alternative to bank lending when it is unavailable or does not offer good terms.
Is less costly, and offers a simpler listing and capital raising procedure for issuers.
Allows investors to invest within the jurisdiction of the AIFC, where their interests are protected in line with international standards and practices.

Listing requirements

Requirements	Standard listing	REMS
Issuer’s business form	JSC or other business form that allows shares to be issued
Issuer capitalization (100%)	> 1 million USD	> 1 million USD and < 1.3 bln. USD^[1]
Market value of publicly traded shares	> 1 million USD	> 1 million USD and ≤ 200 million USD
Offer amount	> 1 million USD	> 1 million USD and ≤ 200 million USD
Free float	25%	15%
Listed securities	Shares and GDRs	Shares
Audited financials	3 years	1 year
Previous period profit	Required	Not required
Prospectus	Full	Simplified (up to 30 pages)
Corporate governance	Compliant with AIFC Market Rules
Issuer annual / semi-annual reporting	Yes	Yes First submission due date extended

[1] Based on a public float maximum admissible market value of 200 million USD (REM2.1) pro rata to 100% of share capital

Click here to download REMS Rules

Some issues to be addressed when preparing for a REMS listing

Offer structure and investor base: engage a financial advisor/underwriter (AIX trade member)
Financial statements: make sure financial statements and an audit firm report are available for the required period
Corporate governance: review/improve corporate governance, appoint independent directors and form Board of Directors’ committees
D&O insurance: at the issuer’s discretion
Existing loans: obtain lender approval if conditions restricting public offers are in place, for example, a change of control

Contacts: [email protected], +7 7172 23 53 66