For now, it is being overseen by venture capital veteran Jon Moulton, who was named chairman of the exchange last April, before the difficulties that led to the sudden collapse of the CISX later in the year.
Moulton is being assisted by Hargreaves Lansdown co-founder Stephen Lansdown, who joined the exchange’s board at the same time as him.
Moulton did not say who, if anyone, is on his short-list for the CISE CEO job.
Officially CISX’s business was acquired by the recently-formed Channel Islands Securities Exchange Authority Ltd on 20 December, following a hearing earlier that day in the Royal Court of Guernsey.
Moulton, a resident of Guernsey, is also chairman of Better Capital, a London-based turnaround specialist, and former managing partner of Alchemy.
As reported, Guernsey chief minister Peter Harwood resigned on Tuesday, in the wake of publication of a critical article in the current issue of the British satirical and investigative publication, Private Eye, which makes reference to Harwood’s previous role as a director of the CISX.
According to Private Eye, Harwood, as a founding director of the CISX until 2010, while also chairman of the Guernsey Financial Services Commission", had thus been for a time “a shareholder/director of a company overseen by the regulator of which he was chairman”.
In a statement, Harwood said he had tendered his resignation in recognition of “the risk to the reputation of [the office of chief minister] and the States of Guernsey, caused by recent media interest in my previous role as a director of the Channel Islands Stock Exchange”.
New exchange is 'free from predecessor's past'
Moulton told International Adviser that CISE, “freed from its [predecessor’s] past issues and with substantial fresh capital, and a strengthened management structure in place, is trading well and expects to announce new products later this year”.
The re-launched exchange has already added a new listing category – convertible loans – he noted, and is expected to benefit from “a much improved structure, with a [newly created] separate regulatory entity with statutory immunity”.
In an interview with the Guernsey Press in January, Moulton described discovering major problems at the exchange, which is located in St Peter Port, Guernsey, soon after he became involved in its running.
About 18 months before he arrived, Guernsey’s regulator had launched an investigation into unspecified “historic activities” at the exchange, and according to Moulton, this had led to major problems in its running that were “killing the business”. At that point, the fact of the investigation was not public knowledge. Moulton then commissioned his own review of the exchange, naming an experienced regulator named Mark Tubby to handle it.
Tubby is compliance chief at broker FinnCap, also headed by Moulton, and according to Moulton, he uncovered significant problems.
The problems inside the exchange began to become public in September with the resignation of founding CISX chief executive Tamara Menteshvili "to pursue other interests". This was followed in October by a suspension of all new listings for a time, to enable, it was explained, staff to carry out a needed restructuring.
The CISX had been founded in 1998, and specialised in listing investment funds – both open- and closed-ended – as well as debt instruments, Channel Island Depositary Receipts and the shares of companies. In April 2013, it listed its 5,000th security, having taken on 510 new listings in 2012 – its most since 2008. Trading volumes in 2012 also rose, by 64%.
