Sponsor Firms are very important at the GBX for a number of reasons.
They help manage the application and listing process for launching a token sale, serve as a layer of scrutiny, take care of ongoing exchange-related obligations for a project, and, in some respects, stand out as representatives of the market.
The GBX is committed to upholding high standards and creating a robust market with the best quality token listings. To achieve this, it is borrowing from the listing process used at its parent company, the Gibraltar Stock Exchange.
At the GBX, if a project wants to launch a token sale it must first engage a Sponsor Firm.
Sponsor Firms are approved by the GBX and must themselves meet specific criteria — they must be appropriately qualified, experienced, and resourced.
The Sponsor Firm will then verify that the project is eligible to list and work with it to ensure that it meets all of the GBX’s listing rules. The Sponsor Firm will also work with the project to complete all aspects of the application paperwork and ensure that all relevant disclosures and documents are submitted. Once this work is complete the listing application will be ready to submit to the Gibraltar Blockchain Exchange.
Working with a Sponsor Firm helps to minimise the risk of rejection for a listing application. The GBX, with its own rules and admissions procedures for Sponsor Firms, works hard to ensure that only the properly capable become Sponsor Firms. If a project is not fit to launch a token sale on the GBX then either it should be rejected by the Sponsor Firm before too much time, money, and energy has been spent, or the project will receive help from its Sponsor Firm to address any shortcomings.
For the listing process, the GBX’s entire official engagement regarding a prospective listing will be with the Sponsor Firm. This helps to streamline the process, ensure greater efficiency, and clearly delineate responsibilities. If there are further questions that the GBX wants to ask then it will refer these to the Sponsor Firm.
When the GBX is satisfied that the application is complete and meets its rules, it will approve the token launch on its platform and listing on its exchange.
Sponsor Firms are also important going forward. The launch of the token sale and listing of the token is not the end of a project’s responsibilities. It must maintain a series of continuing obligations, mostly concerning disclosure of information to the GBX and the market, which Sponsor Firms help to uphold. The GBX also sets rules for a staking mechanism where Sponsor Firms must themselves hold a portion of the tokens of projects that they bring to market.
These measures help to ensure that a project does not just launch a token sale, achieve a listing, and then stop behaving properly.
Projects which fail to meet their continuing obligations will face consequences. This creates an incentive for Sponsor Firms to only bring listings to the GBX which it is confident meet the highest standards that the GBX demands.
The above is a relatively short overview, but hopefully it helps explain some of the processes in place and the roles and responsibilities of those involved which will help the GBX raise standards in the token sale industry.