Fintech firm takes 25% stake in Gibraltar Stock Exchange

Fintech firm takes 25% stake in Gibraltar Stock Exchange

The Gibraltar Stock Exchange has signalled its determination to embrace blockchain technology and absorb virtual currencies into its trading, with its announcement that it has sold a “strategic” 25% ownership stake to an entity called Cyberhub Fintech.

Speaking to International Investment on Thursday, GSX Ltd  managing director Nick Cowan declined to provide details of the sale, including the amount paid, beyond the fact that it was a cash-only deal.

He said that the exchange’s existing shareholders – “private investors known to the founder back in 2014, when GSX launched” – would retain their holding, with Cyberhub’s stake being created out of new equity released by the company.

Cyberhub  was described as a special purpose vehicle that was created expressly for the GSX deal. It is headed by Ben Soh, and wholly-owned by the Broctagon Group, described by Cowan as “a Singapore/Hong Kong-based fintech company that [historically has specialised] in forex technology and trading, but has since expanded into other areas of fintech”.

A statement announcing the deal noted that the deal had initially been referred to the Gibraltar Financial Services Commission, which has now given it the go-ahead.

“The investment signals the Gibraltar Stock Exchange’s continued commitment to expand its capital markets network and influence in Asia as well as its ambition to become one of the world’s first regulated exchanges to fully integrate use of blockchain into its operational processes, from ICO to IPO,” the GSX  statement added.
Cowan (pictured left) added: “The transaction clearly demonstrates high confidence in the jurisdiction, despite Brexit, as well as recognition of the Government of Gibraltar’s and the Gibraltar Financial Services Commission’s initiatives to establish Gibraltar as a global fintech hub.”

As well as the move to embrace fintech, Cowan reiterated that it also signalled a move on Gibraltar’s part to look beyond Europe, to Asia, for capital growth: “Our operational influence and network now extends to Hong Kong and Singapore, and we look forward to working with Ben and the team to establish and grow an Asian-European capital markets pathway.”

Gibraltar officials portrayed the deal as a coup for the jurisdiction, with financial services minister Albert Isola emphasising the importance of fintech in the territory’s plans. Gibraltar, he said, would welcome other firms “who have already excelled in this space and who will work with us to further develop this sector.”

The Gibraltar Stock Exchange was established in 2014, and fully opened in 2015. It currently hosts two classes of member firms, funds and debt securities, on two main markets: the EU regulated, ESMA and HMRC recognised Main Market, and a Global Market, launched earlier this year. This is described as a self-regulated market which is classified as a multi-lateral trading facility, as defined under the Markets in Financial Instruments Directive, and operates under the GSX’s MIFID licence.