IDSX Continuing Listing Obligations

1.1

These Continuing Listing Obligations set out the requirements that an issuer must continue to satisfy while its securities remain admitted to listing and trading on the International Digital Securities Exchange (“IDSX” or the “Exchange”).

1.2

The purpose of these Rules is to ensure that a Listed Issuer: (a) continues to satisfy the conditions appropriate to its listing; (b) maintains an adequate business, governance and operational structure; (c) provides the market with information required under the IDSX disclosure framework; (d) maintains accurate securities, ownership and digital asset records; (e) preserves the rights attaching to its listed securities; and (f) remains capable of supporting a fair, orderly and transparent market in its securities.

2.1

These Rules apply to every issuer whose securities are admitted to listing on IDSX.

2.2

A Listed Issuer must also comply with all other applicable IDSX Rules, including, where relevant: (a) the IDSX Market Rules; (b) the Listing Rules; (c) the Continuous Disclosure Rules; (d) the Periodic Reporting Rules; (e) the Corporate Actions Rules; (f) the Shareholder Rights and Corporate Governance Rules; (g) the Trading Halt and Resumption Rules; (h) the Delisting and Termination of Listing Rules; and (i) any condition imposed by IDSX in connection with the issuer’s listing.

2.3

Where another IDSX Rule contains more specific requirements relating to a particular matter, the more specific Rule applies in addition to these Continuing Listing Obligations.

3.1

A Listed Issuer must continue to satisfy the fundamental eligibility requirements applicable to its listing.

3.2

A Listed Issuer must maintain: (a) valid legal existence; (b) appropriate corporate authority to conduct its business; (c) an identifiable principal business or operating activity; (d) adequate systems and records; (e) governance arrangements appropriate to its size and activities; and (f) the operational ability to comply with the IDSX Rules.

3.3

IDSX may at any time require a Listed Issuer to provide information or evidence demonstrating that it continues to satisfy the requirements applicable to its listing.

4.1

A Listed Issuer must maintain a substantive business or other activity consistent with the basis upon which its securities were admitted to listing.

4.2

A Listed Issuer must notify IDSX if: (a) it ceases or substantially ceases its principal business; (b) it disposes of all or substantially all of its operating assets; (c) its business changes fundamentally; (d) it becomes substantially inactive; (e) it enters liquidation, administration, insolvency or an equivalent process; or (f) any other event occurs that may materially affect its suitability for continued listing.

4.3

Where an issuer undergoes a fundamental change in business, ownership or operations, IDSX may require the issuer to demonstrate that it remains suitable for listing or to satisfy additional requirements determined by IDSX.

5.1

A Listed Issuer must continue to satisfy any applicable requirements relating to: (a) public ownership; (b) public float; (c) shareholder distribution; (d) market liquidity; and (e) concentration of ownership.

5.2

If a Listed Issuer becomes aware that it no longer satisfies an applicable public float or distribution requirement, it must promptly notify IDSX.

5.3

IDSX may require the issuer to submit a remediation plan and may specify a period within which compliance must be restored.

5.4

Where an inadequate public float or excessive ownership concentration materially affects the orderly trading of a security, IDSX may impose trading conditions or take action under the Trading Halt and Resumption Rules.

6.1

A Listed Issuer must comply at all times with the IDSX Continuous Disclosure Rules.

6.2

The issuer remains responsible for establishing internal procedures reasonably designed to identify information that may require disclosure to the market.

6.3

Compliance with this Rule is not satisfied merely because the relevant information has been provided to: (a) a Sponsor; (b) a Broker; (c) a Market Maker; (d) a shareholder; (e) an adviser; or (f) any other third party.

6.4

The Listed Issuer remains responsible for ensuring that required market disclosures are made through the appropriate IDSX disclosure process.

7.1

A Listed Issuer must comply with the IDSX Periodic Reporting Rules.

7.2

The issuer must maintain accounting systems, financial records and internal controls sufficient to enable it to prepare all financial reports and other periodic information required by IDSX.

7.3

Failure to submit required periodic reports within the applicable deadline may constitute a breach of the continuing listing requirements.

8.1

A Listed Issuer must comply with the IDSX Corporate Actions Rules in relation to any event affecting: (a) the number of securities in issue; (b) the rights attaching to securities; (c) distributions to security holders; (d) the capital structure of the issuer; or (e) the entitlement of security holders.

8.2

Relevant corporate actions include, without limitation: (a) new securities issues; (b) dividends and distributions; (c) rights issues; (d) bonus issues; (e) share splits; (f) share consolidations; (g) conversions; (h) redemptions; (i) buybacks; (j) cancellations; and (k) changes to the rights attached to securities.

9.1

A Listed Issuer must comply with the IDSX Shareholder Rights and Corporate Governance Rules.

9.2

A Listed Issuer must maintain governance arrangements appropriate to: (a) the nature of its business; (b) the size and complexity of the issuer; (c) the rights attaching to its listed securities; and (d) its obligations to shareholders and the market.

9.3

The use of digital securities, distributed ledger technology or tokenisation must not, by itself, reduce or alter the legal, contractual or economic rights attaching to a security.

9.4

Any proposed change to the rights attached to a listed security must comply with applicable law and the IDSX Rules.

10.1

A Listed Issuer must maintain accurate and complete records of its issued securities.

10.2

The issuer must be able to determine, at all relevant times: (a) the total number of securities legally issued; (b) each class of securities issued; (c) the rights attaching to each class; (d) the registered holders of those securities where required by law; (e) transfers and cancellations; (f) restricted or locked securities; and (g) any other information required under applicable law or the IDSX Rules.

10.3

The records maintained by the issuer must be capable of reconciliation with the securities information maintained by IDSX and relevant authorised service providers.

11.1

Where a listed security is represented digitally or through distributed ledger technology, the digital representation must correspond to a valid underlying security or legal interest.

11.2

A digital token representing a listed security must not be created unless the corresponding security has been validly authorised and issued.

11.3

The number of valid digital tokens in circulation must not exceed the number of corresponding securities validly issued and available for digital representation.

11.4

A Listed Issuer must maintain systems and controls designed to prevent: (a) unauthorised minting; (b) duplicate issuance; (c) unauthorised burning or cancellation; (d) incorrect allocation; (e) unauthorised changes to token rights; and (f) any other event that could create inconsistency between the digital record and the legal securities record.

12.1

A Listed Issuer must ensure that appropriate reconciliation procedures exist between relevant records, including, where applicable: (a) the legal securities register; (b) IDSX records; (c) distributed ledger or blockchain records; (d) Broker records; (e) Custodian records; and (f) other relevant settlement or ownership records.

12.2

Reconciliation must be performed at intervals appropriate to the nature, volume and risk of the securities concerned.

12.3

Any material discrepancy must be investigated promptly.

12.4

A material discrepancy that may affect: (a) ownership; (b) voting rights; (c) distributions; (d) settlement; (e) the number of securities in circulation; or (f) the integrity of the market, must be reported promptly to IDSX.

13.1

Where smart contracts or similar technical mechanisms are used in connection with listed securities, the Listed Issuer must ensure that appropriate controls are maintained over those systems.

13.2

A Listed Issuer must notify IDSX of any material event involving the relevant digital securities infrastructure, including: (a) a material smart contract vulnerability; (b) unauthorised minting or burning; (c) compromise of administrative or control keys; (d) a material blockchain network disruption; (e) an event causing incorrect ownership or settlement records; (f) a material security breach; or (g) any other technical incident that may materially affect investors or the orderly operation of the market.

13.3

IDSX may require the issuer to provide: (a) a technical explanation; (b) an incident report; (c) a reconciliation report; (d) an independent technical assessment; (e) an audit report; or (f) such other information as IDSX considers reasonably necessary.

14.1

A Listed Issuer must not implement a material migration of listed digital securities to another blockchain, distributed ledger or smart contract architecture without complying with the applicable IDSX requirements.

14.2

The issuer must provide IDSX with sufficient information concerning the proposed migration, including: (a) the reason; (b) existing and proposed technical infrastructure; (c) treatment of existing tokens; (d) migration or conversion process; (e) effect on trading and settlement; (f) treatment of tokens not migrated within the period; (g) security arrangements; (h) reconciliation procedures; and (i) any effect on investor rights.

14.3

A technical migration must not alter the economic or legal rights attaching to the security unless the alteration has been validly approved in accordance with applicable law and the IDSX Rules.

15.1

Where the terms of admission or the IDSX Rules require a Listed Issuer to maintain a Sponsor for a specified period, the issuer must ensure that an eligible Sponsor remains appointed during that period.

15.2

If a required Sponsor resigns, becomes ineligible, is suspended or removed, or is otherwise unable to continue acting, the issuer must promptly notify IDSX.

15.3

IDSX may require the issuer to appoint a replacement Sponsor within a specified period.

15.4

Appointment of a Sponsor does not transfer the issuer’s responsibility for compliance with the IDSX Rules.

16.1

Where the listing conditions or IDSX Rules require a security to be supported by one or more Market Makers, the Listed Issuer must ensure that the required arrangement remains in place.

16.2

The issuer must notify IDSX if it becomes aware that a required Market Maker intends to withdraw, the agreement has terminated, the arrangement is no longer effective, or the issuer otherwise cannot satisfy a market-making condition.

16.3

IDSX may allow a reasonable period for the appointment of a replacement Market Maker.

16.4

Where the absence of a required Market Maker materially affects liquidity or orderly trading, IDSX may take action under the Trading Halt and Resumption Rules.

17.1

A Listed Issuer must maintain at least one authorised person responsible for communications with IDSX.

17.2

The issuer must keep IDSX informed of its current authorised contact person, email address, telephone number, registered office, principal place of business and other contact information required by IDSX.

17.3

Changes to such information must be notified to IDSX promptly.

18.1

A Listed Issuer must maintain records reasonably sufficient to demonstrate compliance with the IDSX Rules.

18.2

Such records may include corporate records, board resolutions, financial records, securities and shareholder registers, digital token issuance and cancellation records, reconciliation records, corporate action records, disclosure assessments, Sponsor and Market Maker arrangements, smart contract and technical change records, and other records reasonably required by IDSX.

18.3

Records must be retained for the period required by applicable law and any applicable IDSX Rule.

19.1

A Listed Issuer must cooperate reasonably with IDSX in connection with the administration, supervision and enforcement of the IDSX Rules.

19.2

IDSX may require information, documents, data or explanations relevant to continuing listing eligibility, securities ownership, financial position, governance, shareholder rights, digital securities, blockchain records, smart contracts, market integrity or compliance with IDSX Rules.

19.3

Information supplied to IDSX must not be false or misleading and must not omit material information where the omission would make it misleading.

20.1

If a Listed Issuer becomes aware that it is no longer complying with a continuing listing requirement, it must promptly notify IDSX.

20.2

The notice should, where applicable, describe the non-compliance, its reason and effects, proposed remedial action and expected remediation timeframe.

20.3

IDSX may require the issuer to implement a remediation plan within a period specified by IDSX.

21.1

Where IDSX considers that a Listed Issuer is not complying with these Rules, IDSX may require one or more remedial actions.

21.2

Such actions may include providing information or announcements, correcting information, restoring public float, appointing or replacing a Sponsor or Market Maker, reconciling securities, obtaining independent financial or technical reviews, correcting registers or digital records, improving governance or controls, or any other reasonable step necessary for compliance.

22.1

A matter that may require a trading halt or suspension will be dealt with under the IDSX Trading Halt and Resumption Rules.

22.2

Possible circumstances include material uncertainty about continuing eligibility; disclosure or reporting failures; material inconsistency in securities or token records; technical failure; inability to maintain an orderly market; or other circumstances where continued trading may materially prejudice investors or market integrity.

23.1

Serious, repeated or prolonged failure to satisfy continuing listing requirements may result in termination of listing.

23.2

Suspension, delisting or termination is dealt with under the IDSX Delisting and Termination of Listing Rules.

23.3

Where appropriate, IDSX may permit an issuer a reasonable opportunity to remedy a breach before terminating its listing.

23.4

Nothing in this Rule prevents IDSX from taking immediate action where required by law or reasonably necessary to protect investors or the integrity or orderly operation of the market.

24.1

The Listed Issuer remains primarily responsible for compliance with these Rules.

24.2

Appointment of a Sponsor, Broker, Market Maker, Auditor, legal adviser, securities registry provider, Custodian, blockchain infrastructure provider or other service provider does not relieve the Listed Issuer of its obligations under IDSX Rules.

24.3

The board and senior management must ensure that appropriate systems, responsibilities and controls support ongoing compliance.

25.1

To the extent permitted by law and IDSX Rules, IDSX may request information, impose additional listing conditions, require independent reports or remediation, restrict or suspend trading, approve alternative arrangements, permit conditional resumption, or take other action reasonably necessary for fair, orderly and transparent markets.

25.2

Discretion or relief in one case creates no entitlement to equivalent treatment in another.

26.1

A Listed Issuer must independently comply with all applicable laws and regulatory requirements.

26.2

Admission does not represent that the issuer has complied with laws concerning the issuer, securities, offers, ownership or transfer, digital securities, financial services, AML/CFT, tax, sanctions, privacy or data protection, or any foreign jurisdiction.

26.3

Where mandatory law conflicts with an IDSX Rule, the issuer must comply with law and notify IDSX if the conflict materially affects its listing or market operation.

27.1

IDSX may amend these Continuing Listing Obligations in accordance with applicable law, its market licence conditions and IDSX rule amendment procedures.

27.2

Amendments may respond to law or regulation, regulatory requirements, market or technology developments, operational experience, investor protection or market integrity.

International Digital Securities Exchange — Continuing Listing Obligations — Draft for Regulatory Development