LuxSE Euro MTF FastLane admission procedure

The Luxembourg Stock Exchange (the “LuxSE”) has launched a new procedure concerning the listing of certain securities on the Euro MTF by updating the Rules & Regulations of the LuxSE (the “Rules & Regulations”) on 10 October 2022 (the “FastLane Admission”). Certain types of securities issued by In-Scope Issuers, as defined below, may be fully exempted from the need to provide a prospectus approved by the LuxSE under the Luxembourg law of 16 July 2019 on prospectuses for securities, as amended. The FastLane Admission process complements the other exemptions from the publication of a prospectus, among other things, item 203.3 of the Rules & Regulations. The FastLane Admission further improves the competitiveness of the LuxSE, particularly in relation to debt securities issued by issuers whose shares are admitted to trading on an EU-regulated market or equivalent.

1. Scope

Indeed, the procedure of FastLane Admission is detailed in Chapter 4: Admission to trading without the approval of a prospectus of Part 2 of the Rules & Regulations. The FastLane Admission concerns the following type of issuers and securities:

  • Non-equity securities and equity convertible bonds issued by issuers whose shares are admitted to trading on an EU-regulated market or equivalent;
  • Non-equity securities issued or guaranteed by states (Member States excluded), their regional or local authorities;
  • Non-equity securities issued by or guaranteed by Member States’ regional or local authorities;
  • Non-equity securities issued by multilateral institutions which are not public international bodies, as defined in the Rules and Regulations, and of which at least one OECD Member State is a member;
  • Securities issued by central banks; and
  • Securities issued by associations with legal status or non-profit-making bodies, recognized by a Member State or an OECD Member State, in order to obtain the means necessary to achieve their non-profit-making objectives. (Each being referred to as an “In-Scope Issuer”, altogether being the “In-Scope Issuers”)

2. Admission Document and FastLane Admission procedure

The In-Scope Issuers shall publish an admission document, being any disclosure document that at least contains the terms and conditions of the securities for which admission to trading on the Euro MTF is sought and is prepared in a searchable, electronic format (the “Admission Document”). The draft of the Admission Document shall be submitted at least three business days before the expected listing date. At the latest at the beginning of the admission to trading of the securities, the final version of the Admission Document must be submitted by the In-Scope Issuer for publication on the LuxSE’s website.

The LuxSE does not approve the Admission Document, but the In-Scope Issuer may opt for the approval of the prospectus voluntarily.

Furthermore, the In-Scope Issuer shall fill out an application form which mentions the public sources for information about the In-Scope Issuer and the securities.

Attention should be put on the fact that when deemed necessary, the LuxSE may require submission of any other document for the examination of the request for admission to trading, according to the particular conditions and nature of the operation and the financial position of the Issuer or guarantor.

Finally, the admission to trading of its securities based on the FastLane Admission does not exempt the In-Scope Issuer from complying with all applicable ongoing disclosure obligations, such as the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, as amended from time to time (commonly referred to as the Market Abuse Regulation).

Please feel free to contact our capital markets team in case you have any questions relating to admission to listing on LuxSE.

Luxembourg Stock Exchange unveils Securities Official List for non-traded securities

The Luxembourg Stock Exchange has launched the Securities Official List, a dedicated section of the exchange’s official list that enables securities to be listed without requiring them to be admitted to trading on either its regulated Bourse de Luxembourg or Euro MTF market.

The SOL, which involves a simplified and rapid registration process, is specifically designed for issuers seeking only the visibility of having their securities on a recognised official list and for which admission to trading is not essential, but that can benefit from the enhanced distribution and diversification of their investor base the new listing section offers.

Exemption from EU market regimes

As a result, they are not subject to the rules governing admission of securities to trading, especially the EU harmonised regimes on prospectus, transparency and market abuse, nor are the periodic and ongoing disclosure and communication requirements applicable to securities admitted to trading on a regulated market or a multilateral trading facility.

The SOL does give issuers the ability to communicate an indicative price for their securities, as well as the opportunity to display securities meeting the applicable eligibility criteria on the Luxembourg Green Exchange. For investors, SOL listings expand the range of securities on the official list available for investment, including access to relevant data as well as indicative prices from the issuer.

Dedicated Securities Official List (SOL) rulebook

The Securities Official List is governed by a dedicated rulebook published by the exchange as well as by the grand-ducal decree of July13, 2007 implementing EU Directive 2001/34/EC on the admission of securities to official stock exchange listing and accompanying information. The rulebook does not apply to securities that are intended to be admitted to trading on one of the markets.

An SOL listing requires only an information notice, which can be in English, French or German, approved by the exchange and published on its website. The notice must set out details of the securities and the issuer and comprise at least sections on introduction and warnings, the issuer and any guarantor, the securities, the risks, and offers. In practice, a prospectus, listing particular or offering memorandum for the offering of the securities can also be used for the SOL listing as long as it includes the information areas specified in the rulebook.

The issuer must also complete standard forms undertaking to comply with applicable legislation and regulations and the terms and conditions set out in the rulebook. It must also submit to the exchange its articles of association and annual reports for the past three financial years, with exemptions for newly-incorporated issuers.

Information requirements of the SOL

The Luxembourg Stock Exchange has sole responsibility for decisions relating to the admission, suspension and withdrawal of securities listed on the SOL and will review the information notice for compliance with the SOL Rulebook.

The latter includes conditions including the legal position of the issuer, minimum capitalisation for issuers of shares (no free float is required), the issuer’s period of existence, free transferability of the securities, and minimum issuance amount of €200,000. It also requires issuers to ensure equal treatment between holders of equivalent shares and equity interests as well as between holders of the same debt securities issues.

Issuers of securities listed on the SOL are required to notify the exchange of any securities and corporate events affecting the securities admitted to listing or the issuer itself, for instance changes in the issuer’s activities or articles of association, early redemptions of debt securities, payment defaults, notice of meetings of security holders, and any other event or information liable to influence the price of the securities. The issuer must equally communicate to the exchange any information it is otherwise required to make public.

All information regarding securities on the Securities Official List and their issuers, including information notices and price history, as well as the SOL Rulebook, is available on the website of the Luxembourg Stock Exchange (see link).

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Luxembourg Green Exchange (LGX)

Since the autumn of 2016, the Luxembourg Stock Exchange has operated the first listing and trading platform worldwide reserved exclusively for environment-focused financial instruments. The Luxembourg Green Exchange (LGX) provides access to securities from a broad range of issuers that are recognised globally as authentically green and offers enhanced information about their environmental characteristics.

The LGX has not replaced the existing Luxembourg markets, but is a dedicated platform complementing the Luxembourg Stock Exchange main market and Euro MTF market. There are no additional costs involved in listing on the LGX, except any related to additional reporting – the market requires issuers to undertake ongoing reporting after a security has been issued. The LGX follows industry best practice, notably the ICMA’s Green Bond Principles and the Climate Bonds Standards issued by the Climate Bonds Initiative.

Green bonds are financial instruments issued to raise capital for projects with positive environmental or climate benefits, and their proceeds are typically backed by the entire balance sheet of the issuer. In addition to green bonds, the LGX may in the future accept other types of financial instrument.

To access the Luxembourg Green Exchange, issuers are required to list on one of the Luxembourg Stock Exchange regulated markets, declare their security to be green, disclose the use of the proceeds, provide an external review, and commit to regular ongoing reporting. Existing issuers may move their securities to the LGX providing they meet all the criteria.

The regime imposed by the LGX and the strict entry requirements enable investors to assess the environmental impact of their investments and enjoy the comfort of knowing they are investing in a credible green bond.

The green bond market is developing rapidly and is set to accelerate further following the 2015 United Nations Climate Change Conference in Paris. LGX issuance is currently dominated by large financial institutions such as the European Investment Bank, the world’s leading issuer of green bonds, Germany’s publicly-owned development bank Kreditanstalt für Wiederaufbau, and Bank of China, which became the country’s first institution to launch a green bond in Europe when its $2.8bn instrument was listed on the LGX. However, more private issuers are expected to join the market in the near future as the market builds a solid market framework for green bonds.