_Since 12 January 2018, the Luxembourg Stock Exchange (LuxSE) has allowed the admission of securities, as defined by the LuxSE rulebook (the Rulebook), to its official list without admitting them to trading. This official list is published in a dedicated section called the LuxSE Securities Official List (LuxSE SOL).
Therefore, there are three lists among the LuxSE’s official lists, namely:
1. The list of financial instruments admitted to listing and trading on the regulated market, which is the classic and most stringent market for the admission of securities in the sense that Issuers will be subject to approval of the prospectus by the Luxembourg supervisory authority, the CSSF. Because the listing is subject to the Prospectus Directive, the Transparency Obligation Directives, issuers must prepare financial statements based on IFRS accounting standards (or the equivalent for IAS). Listed issues are eligible for European passport;
2. The list of financial instruments that are admitted to listing and trading on the Euro MTF market, the alternative market that is an exchange-regulated market and a multilateral trading facility that does not bind issuers to the requirements of prospectus or transparency under the European directives; and
3. The new list of financial instruments that are recorded on the LuxSE SOL without being admitted to trading, the features of which are summarised below.
The LuxSE SOL is an innovative way to attract investors and issuers in European capital markets by giving them the opportunity to render visible on a publicly available LuxSE list securities that will not be admitted to trading.
In this context, the securities comprise capital and debt instruments (e.g. shares, units, bonds, debt securities, certificates representing shares and depositary receipts, money market instruments, etc), (the Securities). It is worth noting that the Rulebook does not apply to securities that are admitted to trading on one of the securities markets operated by the LuxSE, i.e. the regulated and/or the Euro MTF market.
The LuxSE is the competent body to make all kinds of decisions in relation to the admission and maintenance of a title in the LuxSE SOL.
Each issuer of Securities that applies for their admission to LuxSE SOL (the Issuer) must:
- Provide a light information notice in English, French or German (which will be published on the LuxSE website), except if a prospectus has already been approved by a competent administrative authority in accordance with the terms of section 8.1 of the Rulebook.
Furthermore, the Issuer needs to meet several criteria in relation to, among other factors, its legal position, minimum capital requirements, conditions applicable to shares and units. Moreover, the Securities must have a minimum issuance of EUR 200,000 per issue.
There is no specific requirement to update the information notice after it has initially been submitted. The Issuer is, consequently, only subject to a limited information obligation but needs to inform the LuxSE of any events that are likely to affect the Securities or that would facilitate the work of the LuxSE. The Rulebook contains a (non-exhaustive) list of these types of events, such as any change or transfer of paying agent, any change in the name of the Issuer or amendments to the respective rights of Securities.
- Mention whether the Securities are listed and/or admitted to trading on other markets.
- Complete a written confirmation of compliance with the applicable legislation and regulations.
- Complete a written letter of undertaking that the Issuer will comply with the terms and conditions as set out in the Rulebook.
- Provide the Issuer’s articles of association and the annual reports for its past three financial years.
It is worth noting that the LuxSE can request any additional information it deems necessary, which the Issuer is obligated to deliver.
There is no restriction on the legal form of the Issuer, i.e. any legal entity that issues the Securities to be admitted into the LuxSE SOL, as long as the Issuer complies with the applicable law and its articles of association.
The Issuer must respect the Luxembourg law principle of equal treatment of shareholders, i.e. it must ensure the equal treatment of the shareholders or of the holders of the debt Securities who are in the same situation.
Admission to the LuxSE SOL will be denied if it would have a negative impact on the investors’ interests. The LuxSE has the right to remove, suspend or withdraw any Securities from LuxSE SOL, and such a decision will be published on the LuxSE website.
The Securities can be issued at any given time on a spontaneous and voluntary basis. It is even possible to enlist Securities that have been issued for a long period of time. Some financial instruments that are not, strictly-speaking, securities (in the common definition of the term), may also be admitted to the LuxSE SOL (e.g. German law certificates of indebtedness [Schuldscheine]).
The advantages for the Issuer cannot be underestimated
- Registrations of Issuers that are listing on the LuxSE SOL undergo a simplified and rapid process, and will be processed within three business days.
- There is no need for clearing or to conclude settlement via a clearinghouse.
- The Issuers (or any investor in the future) do not need any legal entity identifier for participants in financial markets (commonly referred to as a LEI).
- The Securities of the Issuer will be displayed on the official list of the LuxSE, which will provide accrued visibility for the Issuer.
- The distribution and diversification of the investor base is enhanced; consequently, it is constituted by foreign investors.
- Regulations which would need to be respected in case of an admission to trading do not apply.
- The Rulebook does not prescribe any on-going publication obligations.
- EU harmonised obligations required under (i) MiFID II1/MiFIR2 (reporting), (ii) Prospectus Regulation3, (iii) Transparency Directive4, (iv) Market Abuse Regulation5, such as periodic and ongoing disclosure and communication requirements applicable to Securities admitted to trading on any regulated market or on the Euro MTF market, are not applicable.
- It is possible to list Securities at an indicative price.
- A prerequisite for Securities to be displayed on the Luxembourg Green Exchange is for them to be listed in Luxembourg, and the listing on the LuxSE SOL fulfils this condition. It is worth noting that Securities listed on the LuxSE SOL will need to go through the same admission process as those listed on one of the two other LuxSE markets once they are to be admitted to the Luxembourg Green Exchange.
- The initial and lifelong costs are much lower than the costs for admission to the lists allowing trading on the market.
The investor also benefits from the subscription of Securities admitted to the LuxSE SOL
- The investments in Securities are admitted to the LuxSE SOL.
- The transparency is enhanced by the availability of additional data and information, such as information notices or the price history of the Securities that are published and available to the general public.
- There is the possibility of using an indicative price or portfolio valuation.
1. Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, as currently in force.
2. Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, as currently in force.
3. Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, as currently in force
4. Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, as currently in force
5. Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, as currently in force.