Vienna MTF: Taking complexity out of the listing process
Founded in 1771 as a trading venue solely for bonds, bills of exchange and foreign currencies, Vienna Stock Exchange today is a modern market infrastructure provider for a variety of asset classes. As the spotlight gradually shifts to Vienna in different areas of debt capital markets, Matthias Szabo, Director Debt Listings, speaks to GlobalCapital about how Vienna Stock Exchange caters to the needs of a range of market participants, particularly in structured finance.
Vienna Stock Exchange has a rich history, but in the minds of some market participants, it was only regarded as a niche player in listing debt securities. Has this public perception changed?
I do believe that the public perception of Vienna Stock Exchange in debt capital markets is changing. This year, for the first time, we have surpassed the milestone of 4,000 bonds currently listed in Vienna with a strong underlying upwards trend. Only a few years ago, our exchange mainly served as a well-governed and reliable listing and trading venue for Austrian corporations, financial institutions and the Republic of Austria. Today, two thirds of new listings come from non-Austrian issuers across Europe. This is because international capital market participants are looking for what we have been offering for a very long time: a simple listing process accompanied by an open-minded and responsive group of experts keen to engage in a dialogue to discuss listing solutions.
When market insiders speak about a Vienna listing, they often refer to Vienna MTF, formerly known as the Third Market. How is Vienna MTF different from other listing venues?
Vienna MTF offers a flexible and reliable alternative listing solution when debt issuers do not require a regulated market but still require a listing on a recognised stock exchange.
Our mission is to remove common barriers and headaches when listing debt securities on an exchange, such as tedious review procedures on listing documentation and excessive “one-fits-all” disclosure requirements. We truly believe that the process of listing bonds should not be overcomplicated and stick to our mantra of “making things simple”. In our everyday work, we ask ourselves “How can we save our clients a great deal of work?” and at the same time ensure market integrity. Our core values are clearly reflected by the way we communicate with clients, how we design our listing rules and admission requirements for Vienna MTF and how quickly we can adapt to the needs of market participants.
What are the benefits of a Vienna listing for private, structured or repack transactions? Can you discuss some of the specific advantages for issuers and their legal counsels?
Debt issuers listing bonds on Vienna MTF may choose whether to make information publicly available. Together with their investors, issuers know best what information is required and which reporting frequency is the most useful. That offers greater flexibility in financial market communications for debt issuers, particularly in private transactions with typically only few hold-to-maturity investors.
When reviewing listing documentation, we focus on information which is relevant for the admission to listing and simply cut the rest. This pragmatic approach considerably speeds up the listing process and can save issuers and legal counsels a lot of additional work by reducing the amount of paper work.
Equally important, our partners have come to rely on us for our responsiveness. Throughout the whole listing process, communication almost feels like being in a live chat with our listing experts instead of a formal and bureaucratic procedure of making a submission to a traditional authority.
There is a whole host of reasons to list securities on exchanges. One of the main reasons is often tax efficiency. Typically, English and Irish issuers take advantage of one of the most important exemptions to withhold tax in debt capital markets transactions: the “Quoted Eurobond Exemption”. Do these exemptions apply to debt securities listed on Vienna MTF?
Yes, for both Irish and English issuers the withholding tax exemptions apply when listing bonds on Vienna MTF. By virtue of the Finance Act 2018, the UK Eurobond exemption also applies to securities admitted to trading on a multilateral trading facility operated by a recognised stock exchange regulated in the European Economic Area. Vienna Stock Exchange is a recognised stock exchange by the UK HMRC. Likewise, the Irish Revenue has confirmed that Vienna Stock Exchange including all of its markets is a recognised stock exchange for the purposes of Section 64 Taxes Consolidation Act 1997.