A partnership between the innovative Stock Exchange of Mauritius and social enterprise Nexii is making great progress towards setting up the Impact Exchange (iX) board on a globally recognized stock exchange. This will enable businesses that have social impact to list debt and equity securities, as allow impact investment funds to list. According to a report on Forbes.com, so far 6 companies have gone through the iX board listing process and the board expects to start trading in the third quarter of 2013.
SEM is a member of the World Federation of Exchanges and one of platforms for trading debt, equity and derivatives, and it can also trade and settle in many currencies, including USD, GBP, Euro, Mauritian Rupee. SEM is regulated by the world-class Financial Services Commission of Mauritius and has automated trading and settlement services. It is a recognised stock exchange by Her Majesty’s Revenue and Customs in the UK, and an approved stock exchange by the Cayman Islands Monetary Authority. SEM’s data is live on all major international data vendors – including Bloomberg, Thompson Reuters, Financial Times, Factset and I-Net Bridge – provided significant global access for listed companies and investors alike.
Nexii was created by Tamzin Ractliffe, a South African pioneer in impact investing marketplaces. The new marketplace is aimed at the retail market, so that any investor will be able to buy and sell shares not just qualified specialist investors. Ractliffe initially set up a platform for unlisted securities 12 years ago. In 2009, she worked with the Rockefeller Foundation to bring together a group of social entrepreneurs/impact investors interested in creating social stock exchanges and marketplaces. She spent 18 months researching the market and, in May, 2011, she received formal regulatory approval from the FSC to launch the iX.
For all of the 6 companies that will launch the iX, this will be their first listing. Forbes.com correspondent Anne Field quotes Ractliffe: “Going to the market for money is not something they’re used to. The process of encouraging companies and getting them to understand the value of being part of a marketplace – that’s been quite a lot of work.” To be eligible for listing, companies need a clear social or environmental mission and need to have in place a reporting system for non-financial impact. The also need to work with intermediaries, known as Authorized Impact Representatives (AIRs), who are accredited to NeXii. Nominated Impact Advisors help the social enterprise during the listing process. Once the company is listed, Impact Verification Agents work with the business to make sure it meets ongoing reporting requirements and audits impact reports. Ractliffe says she’s accredited a handful of impact advisory firms so far.
The process can be costly and Ractliffe says she is discussing creating a technical assistance advisory fund that would help finance the cost of the listing process with “a number of development financing institutions”. This fund would also have a financial and impact return.
The new stock exchange was launched in May 2011 at the first Social Capital Markets (SOCAP) Europe Conference at the Beurs van Berlage in Amsterdam – the site of the creation of the capital markets where the first stock was traded in 1602.
According to the NeXii website: “We believe that this board is a powerful tool for facilitating the flow of investment capital to social businesses. The iX represents the next generation of stock exchanges and how these established financial institutions can help transform the capital raising opportunities available to social businesses. The iX provides mission protection for listed social businesses. This means that your reputation as a social business is maintained even though you are issuing public securities. The iX is fully committed to all stakeholders in the impact capital market and it is an effective platform to coordinate information, build intermediary activity and enable analyst coverage of impact investments. The iX is how we connect social businesses to public capital and mainstream investors to change.”