The document discusses the GXG First Quote, an exchange primarily aimed at small and medium sized companies. It launched in August 2011 and as of February 2013 had 79 listed entities. The exchange has three tiers for companies at different stages: GXG Official List, GXG Main Quote, and GXG First Quote, which had 60 companies listed. The exchange underwent a rebranding in January 2013.

1. CPD Seminar
The GXG First Quote
21 February 2013
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2. The GXG Exchange – Overview
 Launched August 2011;
 On 15 February there were 79 entities listed on the exchange;
 The value of shares traded during 2012 exceeded €124m;
 Aimed primarily at small and medium sized companies;
 3 tiers to provide for companies at different stages of development;
 GXG Official List (5 companies);
 GXG Main Quote (14 companies); and
 GXG First Quote (60 companies).
 Re-branding took place in January 2013 including amendments to the rule books for the different market segments and
name changes;
 Head of markets in the UK is Simon Kiero-Watson, we have his direct contact details and also those of Alex Benger, both of
whom are very helpful;
 Three clients currently with a listing;
 Lottoarena Entertainment plc, market cap €30m
 Rapid Nutrition plc, market cap €53.32m
 2Up Gaming (Terminated), market cap £266.45m
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3. Introducers/Advisors
 There are two types of advisors:
 GXG Corporate Advisors; and
 First Quote Introducing Partners (including London Registrars plc).
 First Quote Introducing Partner – Responsibilities re introductions:
 Demonstrate suitable experience in company formation, corporate structuring and market listing;
 Ensuring companies are suitable for listing;
 Ensuring the company has appointed a suitable registrar/transfer agent;
 Ensure companies shares are registered for settlement via CREST/Euroclear/VP Securities;
 Supplied/completed the application forms.
 Ensuring Companies are suitable for listing, taking account of:
 Incorporated status;
 Current and proposed share structure;
 Obtaining the ISIN;
 Dematerialisation of shares into suitable settlement system;
 Operating history;
 Current and future business strategy and risks involved;
 The internal/external persons with voting control;
 Corporate governance controls to ensure compliance with the exchange rules;
 Financial position of the company and adequacy of its working capital.
 Other matters to consider:
 Suitable procedures for avoiding conflicts of interests;
 Notification to market if the advisor becomes a director of the company;
 Notification to market if the advisor holds shares in the company;
 Ensure advisor does not trade in shares when in possession of price sensitive information;
 Suitable records of advice given to the client maintained for a minimum of three years;
 Electronic records to be accessible within a reasonable time frame;
 GXG may conduct regular visits to the offices ;
 GXG may suspend/withdraw advisors.
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4. Introducers/Advisors
continued
 Introducer must notify GXG of:
 Changes to name;
 Changes to trading address, registered office address and/or any branch from which it operates;
 Changes to their regulatory authorisation;
 Changes to their legal status (ie a private/public co);
 Any disciplinary action against the Introducer, an employee by a regulatory body;
 Appointment of administrator/winding up order/insolvency process;
 Change in control ;
 Change in the board;
 Change to key personnel who hold regulated or controlled positions/functions.
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5. How to Trade
 Most trades settled through CREST;
 Name of the trading platform is Tellus;
 First Quote need to have shares dematerialised before trading however some may not be CREST/Clearstream/Euroclear
registered for settlement and can be settled via residual settlement between brokers;
 Match Bargain Basis:
 Broker enters price and volume – instruction left open in Tellus for between 15mins and 60 days;
 Traders are automatically matched;
 Broker cannot put in more than is owned by his client – prevents short selling;
 Settlement = T+3 days;
 Exchange does not charge transactions.
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6. Market Tiers – Overview
Market Status Requirements
Segment
Official List  Fully regulated under MiFID,  Prospectus;
 Recognised for secondary listing in Frankfurt.  IFRS accounting standards,
 Min market cap of £5m on admission,
 Appoint a sponsor.
Main Quote  Not fully regulated but essentially the same  GAAP accounting standards,
platform as the Official List,  Min market cap of £1m on admission,
 Trading is under the GXG’s Multi Lateral Trading  Appoint a corporate advisor,
Facility (MTF) license and therefore applications  Must be a plc,
are decided by the exchange and not the  Must know the rules!
FSA/Danish FSA,
 Possible tax advantages eg EIS scheme,
First Quote  Unregulated,  Suitably incorporated,
 Trading under MTF license same as Main  Require an Introducing Partner,
Quote,  Submit application docs,
 Information restricted to advisors/professional  Fully paid up shares ranking pari passu,
investors.  Comply with laws of company of incorporation,
 Pay fees to the exchange,
 Know the rules!
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7. First Quote
Ongoing requirements
 An issuing company must ensure all announcements to the market are fair and accurate, not misleading and do not contain
vital omissions;
 Issuer is required to notify the market of:
 changes on share structure;
 changes of overall ownership;
 changes in directors;
 share dealings by the directors;
 Publish private placing documents and/or public offer documents;
 Ensure that there are suitable procedures in place so that all employees, Directors, Connected parties etc do not trade
shares when they are in possession of price sensitive information;
 Submit annual accounts to the market, no later than required under local laws;
 Fundamental change in business must be notified to the market, including;
 Disposal of assets (over 12 months) which exceed 25% of the assets of the company ;
 Where a disposal divests the issuer of substantially all of its trading business.
 Rules about Reverse Takeovers;
 Sanctions include suspension, fines, termination of listing;
 Company may delist provided the shareholders resolve to do so.
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8. First Quote
Admissions
 The GXG have an application document for issuers. There are three forms, 1 for issuing companies, 1 for directors and 1 for
controlling shareholders to complete;
 The information required includes:
 Basic information about the company and its officers, share structure etc;
 Details of the officers’ roles and other appointments;
 Details of share warrants and options,
 Percentage of shares in public hands;
 Summary of business;
 Two years audited financials or an explanation as to why this is not available;
 Latest management accounts;
 Cash flow projections for the next 12 months;
 Details and copies of important contracts/licenses fundamental to the business;
 Details of important IP rights.
 Share price and market capitalisation – requires evidence except First Quote does not require a share price:
 Previous quotation on Frankfurt (and presumably another exchange);
 Report from a broker/analyst;
 Details of the amount paid in a recent (last 6 months) fundraising.
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