#2008-009 VSTEX rules amendments (December 16, 2008)Today our
Listing Rules have been amended by expanding the section on IPOs in order to cover SPOs as well.
As usual, the latest changes are outlined in red.
Changes relate to the introduction of new rules to cover Secondary Public Offerings; this was needed, due to the raising number of requests we get from our issuers looking to increase their paid-in capital, expand or reallocate major shareholdings.
There are a few general principles behind the new rules. As there is a time limit for Initial Public Offerings, an issuer secondary should not lock shareholders investments for a lenghty period of time. if well presented and marketed, this offering should not take more than three weeks to complete.
Also, secondary offerings launched by issuing new shares need to be backed up by a solid plan and proper information must be given about the offering. At the same time, the repeated usage of secondary offerings in order to raise new funds should be discouraged, since a company should look for alternate ways to raise cash (e.g. loans). Offering new shares to the public in order to generate more cash should be an extraordinary and motivated method.
#2008-008 VSTEX rules amendments (November 27, 2008)Today our
Listing Rules have been amended by simplifying Rule #10 and adding a new Rule #12 in "Section D - Company prospectus and reporting".
As usual, the latest changes are outlined in red.
Changes relate to the introduction of a
standard reporting template (click), mandatory for every quarterly report published by VSTEX Issuers. Reports must now be sent to VSTEX at the
communication@vstex.net email address. General diffusion by any viable mean is recommended.
Up to now, our issuers were free to post their reports in any format they liked and using a wide range of publication methods. After extending the set of info to be provided, we're hereby introducing a mandatory reporting template. Using the template, VSTEX Issuers will provide to shareholders, prospective investors and the general public easy to understand and compare reports.
While by sending the report to VSTEX all obligations will be fulfilled, our issuers are strongly encouraged to make financials data generally available. We also encourage them to report monthly and not only quarterly.
#2008-007 VSTEX rules amendments (November 17, 2008)- What You Need To Know
Our Listing Rules do evolve and adapt in accordance with the evolution of SL financial markets and new issues arising from time to time. Also, dealing with corporate issues on a timely manner and not leaving companies hanging in trading halts waiting for the release of material information are needed steps to be taken in order to keep and build up investor confidence and security.
- Additional Information
For more detailed information, please see our Listing Rules (Trading halts and delisting rules - Rule #1 and #3)
Today our
Listing Rules have been amended by adding new items to Rules #1 and #3 in the "Trading halts and delisting rules" section.
As usual, the latest changes are outlined in red.
Changes relate to the ability of issuers to request a trading halt; normally the VSTEX suggests and takes the initiative to initiate a trading halt; with the today amendment we explicitly add a right for the issuer to ask for a trading halt at the time of sending us important material info. Due to the utmost care the VSTEX applies on initiating trading halts, this is more of a formal change than anything else.
The most important change is about the maximum time allowed for trading halts to last, when requested by the issuer. It may happen that some facts beyond the control of the VSTEX may lead to long trading halts and a situation where shareholders and traders are confused. Some issuers may miss the importance of keeping communication channels open.
That's why the VSTEX does now set a time for the maximum duration of trading halts. The issuer should prepare for important changes in advance, so he can deal with them on a timely and quick manner.
#2008-006 VSTEX rules amendments (October 29, 2008)- What You Need To Know
Our Listing Rules do evolve and adapt in accordance with the evolution of SL financial markets and new issues arising from time to time. Also, improvements in the reporting area and strong focus on ethics are needed in order to keep and build up investor confidence and security.
- Additional Information
For more detailed information, please see our Listing Rules (Sections A, B, D)
Today our
Listing Rules have been amended by changing some rules in Section A, Section B and by expanding our Section D to cover financial reporting with more details.
As usual, the latest changes are outlined in red. Rules no longer effective are outlined in red and striked through.
Changes in Section A relate to the "Code of Ethics" which until now we have been recommending. With the rules update, it's now
mandatory. Since now every VSTEX issuer is expected to adopt and enforce a Code of Ethics, additional promotion for those doing so is no longer available.
Section B (IPO Specific Rules) saw a more extended update. We fixed a minimum level for the IPO; companies needing to raise less than the amount specified in the rules should not look for a public listing; they should resort to loans and/or private investments.
Other changes include a limit on the amount of shares to be locked in order to make sure that "true" owners of the company also control the majority of shares. Previously there was no limit on the maximum amount which could be locked, a limit is now set at 60%. Existing issuers are expected to comply
before the end of November 2008 and where applicable they will receive a separate notice with further instructions. RIght now there is no limit on the total amount of shares insiders can hold, however public companies are meant to be just that, public.
Now voting for the approval of IPOs has been officially extended to all the holders of a VSTEX account, not only to our major shareholders. All voting operations will last 14 days.
Last significant change in Section B, now it is forbidden for owners of locked shares and insiders to buy, collectively, more than 5% of the total issued shares in their own IPO. Initial Public Offerings should be targeted at the public.
Section D has been changed so that issuers are invited to post financials in the forum we provide them with, but the most important changes are in the reporting area. It's now mandatory to publish a list of assets and liabilities, though not in the form of a balance sheet. Until now we've been asking for a single-step income statement, which basically measures the cash flow in/out. This way the general public and investors can't have direct knowledge of the company assets and liabilities.
Now VSTEX issuers are required to detail those and this will, along with the reporting of stock options assignments, allow for more transparency.
#2008-005 VSTEX rules amendments (October 15, 2008)- What You Need To Know
The VSTEX has been growing as the most professional stock exchange, with the most extensive set of rules and regulation. Nowadays, the VSTEX is the "closest to real life exchanges" amongst its Second Life competitors. The VSTEX is also the undisputed leader for communication and transparency. This is an exceptional business card for every VSTEX issuer; by their listing on the VSTEX they can share the benefits of being a part of a reputable, ethic virtual exchange.
- Additional Information
For more detailed information, please see our listing rules (Section C)
Today our listing rules have been amended by introducing a new Continued Listing Fee, to be paid yearly. With the time the VSTEX is growing as the closest to "real life" exchanges in the Second Life panorama.
By working with several issuers, their CEOs and managements, the traders and the press, we learned a lot and we're finetuning our rules and policies accordingly.
If you're familiar with real life stock exchanges you will be aware that their fees structure is more complex than the one usually applied on SL virtual exchanges (an IPO fee and a fee on stock trades); real life exchanges also have minimum listing requirements (for example a company may delisted if the stock price stays lower than a set level for more than a specified period of time).
There is an old debate about SL being a game or not, stock exchanges themselves being a game or not. We stand by our point; this is a simulation and as a simulation gets closer to the "real thing" time after time. We spent a great deal of time issuing new rules and since August (see our Issuer Alert #2008-001) we've been giving a new impulse to our fee structure.
It must be noted, we're well aware that a VSTEX listing is becoming more expensive than the one you could get with any of our competitors; if you look "under the hood" though, you realize that it all makes sense. The new Continued Listing Fee is as low as 12,000 L$/year. That's 1,000L$ a month, an amount of virtual money that doesn't even allow someone to rent a 512 sq.m. parcel in Second Life.
If an issuer can't afford such a fee, then one should question the management, asking if the company deserves to be publicly traded. It happens with every virtual exchange, sooner or later. A company has maybe a million L$ or more IPO, after a while the business is almost non existant, communication with shareholders and the exchange drops to negligible levels. The company becomes a public shell (see our
listing rules Section F), it's open to market abuses, speculations and the likes.
When the company "goes South" then both investors and the exchange are left with the ashes. Investors do lose L$, the exchange gets a black spot on its reputation (at least).
By the reworking of our fees structure we aim to raise the level of listed companies, with solid and sound businesses admitted to our trading room; we also aim to protect the investors by the means of early warning signals for non-compliance and by giving them more robust companies to pick from, for their investments in virtual securities.
This also helps our issuers committed to compliance, transparency and fair market practices. By improving the quality of VSTEX listings, they can go proud of having a spot in our trading room. The VSTEX will also keep adding value to the listings.
#2008-004 Division of Enforcement (August 27, 2008)- What You Need To Know
The nature and the diversity of VSTEX rules and policies, and proper organization principles, do require to differentiate between some of the activities performed by and on the VSTEX and its officials.
- Additional Information
For more detailed information, please see the info about our Division of Enforcement
Up to the publication of this Issuer Alert, compliance and enforcement for our issuers and members have been handled by Vstex Company Communication and Public Relations Department.
The growing set of rules and policies applicable to this Exchange, its issuers and its members, plus the need for a better and proper organization, do now require VSTEX Virtual Stock Exchange (a branch of Vstex Company) to adopt a new organizational model.
The first step of this model is the introduction of a "
Division of Enforcement".
This Division (to be staffed according to the requirements and needs arising from time to time) will be part of a structured process that will allow for better communication with CEOs, investors and the general public, plus it will allow for overall greater transparency.
In order to allow this Division to operate to its full extent, we'll set procedures and methods, bearing in mind that:
- CEOs should have no doubts about what they should do, how and why
- enforcement processes should aim for that "crystal clear transparency" we're committed to.
This translates into publicly available procedures and methods, and in publishing as much informations as possible, with full disclosure commitments after final resolutions will be issued.
It must be noted, rules and applicable methods and procedures are not meant to make CEOs and company managers life harder. The VSTEX has a commitment for ethics, transparency and fair market practices. Our rules and policies do originate from "real life" laws, regulations and policies. A professional, fair, transparent and orderly market can't do without those rules.
So, compliance with our rules should not be seen as "extra work", but as a commitment to professionality, transparency and orderly market practices. Keeping a listing with an highly self-regulated exchange like the VSTEX should be a source of proud and an exceptional "business card" for every issuer customers and business partners.
#2008-003 Mandatory shareholders meetings (August 21, 2008)- What You Need To Know
One of the VSTEX aims is to set minimum levels of communication with shareholders, the press and the general public. This applies to every VSTEX issuer.
VSTEX listing rules do require listed companies to hold at least two shareholders meetings.
- Additional Information
For more detailed information, please see our listing rules (Section A)
Our listing rules (Section A, Rule 6) require VSTEX issuers to hold
at least two public meetings every year, no later than 30 calendar days past Q2 and Q4 end.
This means, those meetings are
mandatory and we expect every VSTEX issuers to hold at least them. This can be traslated into "Those two meetings are mandatory, you're encouraged to hold additional meetings, though not strictly required".
The purpose of the rule is to have companies report to shareholders after the first half of the year and after the full year, where written reports are not enough and shareholders must be met and allowed to ask questions in a general meeting.
Every VSTEX issuer failing to hold the Q2 general meeting can gain back compliance by holding a general meeting no later than
October 15, 2008. Past that date, an infringement notification will be sent to the company CEO.
We won't allow delays for the next planned meeting (after Q4 2008), so VSTEX issuers should act accordingly and prepare in advance.
#2008-002 Shareholders meetings and exercise of certain rights of shareholders in listed companies (August 21, 2008)- What You Need To Know
Holders of shares carrying voting rights should be able to exercise those rights given that they are reflected in the price that has to be paid at the acquisition of the shares. Furthermore, effective shareholder control is a pre-requisite to sound corporate governance and should, therefore, be facilitated and encouraged.
VSTEX listing rules do require listed companies to indicate rights and restrictions applying to shareholders and appointed proxies.
- Additional Information
For more detailed information, please see our listing rules (Section E)
Our listing rules allow VSTEX issuers to set some limitations and conditions on certain shareholders rights to be exercised in general meetings. Due diligence requires listed companies to state those limits in a clear, accessible way.
When shareholders don't know what those limitations and conditions are, they can't exercise their rights in full. Our "Section E" has been up for a while now and it's time for every VSTEX issuer to use due diligence in abiding by the spirit of the Section.
We expect every VSTEX issuer to take action before
October 15, 2008. Expired this deadline without any action from the issuer, a notice will be sent to the CEO by email. Without a positive answer from the CEO, the VSTEX will enforce over the company the
same policy used by Vstex Company (click).
That policy will be also forcefully posted on the forum provided by VSTEX to the issuer. The issuer will be required to comply with that policy, thus it will retain the right to amend/change/integrate that policy as long as compliance with Section E will be kept.
#2008-001 VSTEX rules amendments (August 20, 2008)- What You Need To Know
Issuers submitting an application to list any class of securities (not otherwise identified) on the VSTEX Virtual Stock Exchange, shall pay to VSTEX a fee calculated on total shares outstanding.
An issuer listed on the VSTEX Virtual Stock Exchange may request from VSTEX a written interpretation of the Rules contained in the Listing Rules page. In connection with such a request, the issuer must submit to VSTEX a non-refundable fee.
- Additional Information
For more detailed information, please see our listing rules (Section C)
Today our
listing rules have been amended by introducing a new Section (C) after Section B. All of the following Sections have been reclassified accordingly.
With this amendment we're introducing a dedicated section for fees applicable to VSTEX issuers. As of now those fees are for: a) initial listing of a class of securities on the VSTEX Virtual Stock Exchange b) requests for written interpretations of our
listing rules (Staff Interpretation Letters).
While we're gearing towards the new generation of our platform (Vstex 3.0), we reckon that 1) more services and more professional advice will be needed from our issuers 2) our current rules are by far the most advanced (and complex), compared to the ones published and enforced by our SL competitors.
Also, our experience so far led us to a conclusion: we must protect the market, hence our traders, from unscrupolous and unprofessional CEOs.
Our new entry fees are specifically meant to help driving out from our market unscrupolous CEOs that will submit an application to more than one exchange, just to launch the IPO on the one faster in sending the acceptance, or that will try to list separated companies holding the same assets (for example, 2 separated companies can't own 100% of the very same land, at the same time). The entry fees will also help with "wannabe" CEOs sending listing applications just for fun, or not serious enough to stay in business.
The highest entry fee amounts to L$10,000 with L$1,000 as the minimum rate. While such a fee won't stop the most determinated scammers, it will help a lot with the categories indicated above. We asked ourselves if an entry fee was going to deter new listings. We came to the conclusion that a company trying to launch a L$1,000,000 (as an example) IPO shouldn't be really in business when it can't afford a fee which can be as low as L$1,000.
On to Staff Interpretative Letters, they were due since a while ago. Our rules have been growing at a steady rate and often CEOs have asked us for interpretations. We reckon that they deserve in depth. detailed responses, which can't be vague or leave room for further interpretations. In order to maintain the professionality of our staff and to help with the costs, we'll be charging a small fee for each Staff Interpretative Letter.
Since it won't be ethic to be paid twice for the same answer, each Staff Interpretative Letter will be published (in an anonymous way) on our web site, for other CEOs reference. Also, the general public may benefit from such publication, by gaining a better understanding of rules applicable to VSTEX issuers.
