Re-shaping the Listing of Financial Instruments - The Luxembourg Stock Exchange and its revamped official list
12 January 2018
The Luxembourg Stock Exchange is well-known in the sphere of European capital markets for its open-minded approach to innovative solutions. After success stories like the Luxembourg Green Exchange (LGX) platform which was launched in 2016 and the Financial Instruments Reporting Services Tool (FIRST) made available in 2017, it has now taken a closer look at the structure of its official list.
The result is a completely new section that will be added to the existing two sections relating to the Luxembourg Stock Exchange’s regulated market (Bourse de Luxembourg) and the Euro MTF Market. This new section will be called the Luxembourg Stock Exchange Securities Official List (LuxSE SOL) and it is intended to give clients a further option to consider in relation to the listing of securities issuances.
1. Listing without trading
The innovation behind this new section of the official list lies basically in an amendment to the Luxembourg Stock Exchange’s Rules and Regulations (the ROI) that have recently been updated in the context of the application of MiFID II1 / MiFIR2. Article 701 of the ROI stated until now that an admission to the official list was not possible without a simultaneous admission to trading of the relevant securities. The Luxembourg Stock Exchange now allows registration of securities solely on the Official List without admission of these securities to trading on any of the markets operated by the Luxembourg Stock Exchange. This is intended to allow issuers to have their securities appear on a widely recognised official list, without the application of a number of capital markets related EU and national laws that solely focus on securities being admitted to trading.
As a consequence, it is now of the utmost importance to clearly distinguish between an admission to the official list, commonly referred to as a ‘listing’, and an admission to trading on one of the markets operated by the Luxembourg Stock Exchange (which an issuer can apply for, without requesting admission to the official list at the same time). In order to emphasise this division, the Luxembourg Stock Exchange has created a rulebook that will only apply to the LuxSE SOL (ie admission to the official list without admission to trading). For requests for an admission to trading (with or without admission to the official list), the rules set out in the ROI will continue to apply.
2. Admission to LuxSE SOL
The LuxSE SOL, together with the other two sections of the official list, are governed by the Grand-ducal regulation dated 13 July 2007 relating to the keeping of the official listing for financial instruments (the RGD) which implements Directive 2001/34/EC3 into Luxembourg law. It is therefore not surprising that the content of the rulebook consists to a large extent of the well-known provisions of the RGD (as they are also set out in the ROI). This also applies to the securities that can be registered on the LuxSE SOL, although the Luxembourg Stock Exchange has extended the scope upfront in order to also cover certain derivative securities as well as money-market instruments.
Similarly to the existing application processes with the Luxembourg Stock Exchange, a specific application form and some declarations and documents must be submitted prior to the admission to the LuxSE SOL. In addition thereto the Luxembourg Stock Exchange requests an Information Notice or a document containing the same amount of information. The intention is to accept prospectuses which have been approved by other authorities instead of insisting on a document solely drafted for the purpose of the admission to the LuxSE SOL. It is at the discretion of the Luxembourg Stock Exchange to decide whether they accept such prospectus or whether they will require the issuer to produce an Information Notice drafted in accordance with the rulebook. Schedule 1 of the rulebook sets out the mandatory data and information to be included in the Information Notice. The content of this schedule is largely inspired by the provisions on summaries set out in Commission regulation (EC) No 809/20044. It must be noted that the Information Notice is subject to the approval of the Luxembourg Stock Exchange. It is worth noting that issuers do not need to provide a Legal Entity Identifier and that the securities to be registered on the LuxSE SOL do not need to be cleared. For the purpose of a clear identification of the securities, the Luxembourg Stock Exchange requires an ISIN code for each security registered on the LuxSE SOL.
The ongoing obligations imposed by the LuxSE SOL rulebook are limited to certain events affecting the securities and/or the issuer. These rules are not new as they have been taken from Chapter 9 of the ROI. It is however important to note that none of the information covered in these rules must be made public. Such information must only be communicated to the Luxembourg Stock Exchange. The only publication obligation relating to securities admitted to the LuxSE SOL relates to the right of the Luxembourg Stock Exchange to request an issuer to issue a press release which contains the announcement of a suspension or withdrawal of securities from the LuxSE SOL. Such suspension or withdrawal must be formally requested by the issuer but can also be requested by the Luxembourg Stock Exchange at its own initiative.
1 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU
2 Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012
3 Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities
4 Commission regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements