Listing without trading – The Luxembourg Stock Exchange’s Securities Official List
Introducing the Securities Official List
The Luxembourg Stock Exchange (LuxSE) has recently launched its Securities Official List (SOL), a dedicated section of the LuxSE’s official list. It enables issuers to admit their securities to the official list of the LuxSE without requiring such securities to be at the same time admitted to trading on one of its markets (i.e., the regulated market Bourse de Luxembourg or the Euro MTF). The SOL is specifically targeting issuers looking for visibility and a listing of their securities on a recognised official list only and for whom admission to trading is not a prerequisite. There are several key benefits of listings on the SOL for issuers:
- the securities benefit from enhanced visibility;
- issuers are not subject to the rules and regulations relating to the admission to trading of securities (notably the EU harmonised prospectus, transparency and market abuse regimes);
- the complex and burdensome framework relating to the periodic and ongoing disclosure and communication obligations applicable to securities admitted to trading on a regulated market or a multilateral trading facility will not apply;
- issuers rely on a simplified and swift registration process;
- issuers have the opportunity to communicate an indicative price in respect of their securities;
- it ensures an enhanced distribution and diversification of investors for issuers; and
- it provides issuers the opportunity to display their securities meeting the applicable eligibility criteria on the Luxembourg Green Exchange of the LuxSE.
From an investor’s perspective, listings on the SOL provide them the opportunity to invest in a broader pool of securities listed on the official list, with access to data relating to the securities listed on the SOL and enables investors to rely on indicative prices (as determined by the issuer itself) and portfolio valuations.
Framework and Admission
The LuxSE SOL is governed by the dedicated rulebook of the LuxSE (available through https://www.bourse.lu/luxse-sol) (the SOL Rulebook) and Grand Ducal Regulation of 13 July 2007 implementing Directive 2001/34/EC on the admission of securities to official stock exchange listing and on information to be published on those securities. The SOL Rulebook will not be applicable for securities which are also intended to be admitted to trading on one of the markets operated by the LuxSE.
In terms of documentation, a listing on the SOL only requires an information notice (the Information Notice) which shall be approved by the LuxSE and published on the LuxSE’s website. Such Information Notice can be drawn up in English, French or German. The Information Notice must detail the securities and the issuer and needs to comprise at least the following sections (the precise content of each section being described in further detail in the SOL Rulebook):
- Section A on Introduction and Warnings;
- Section B about the Issuer and any Guarantor;
- Section C about the Securities;
- Section D about the Risks; and
- Section E about the Offers.
In practice, a prospectus, listing particular or offering memorandum prepared in connection with the offering of the securities at hand can also be used for the purpose of the SOL listing to the extent it includes the relevant information blocks specified in the SOL Rulebook.
In connection with the application process itself, the issuer will also need to provide the LuxSE with a couple of customary forms whereby the issuer among others undertakes to comply with the applicable legislation and regulations binding upon it and the terms and conditions set out in the SOL Rulebook. Lastly, the issuer will similarly need to submit to the LuxSE its articles of association and annual reports (for the last three financial years, subject to derogations notably for newly incorporated issuers).
The LuxSE is the sole competent body for all decisions relating to the admission, suspension and withdrawal of securities to the SOL and will during the admission process review the Information Notice to ensure it complies with the requirements set out in the SOL Rulebook.
The SOL Rulebook further sets out a number of general conditions applicable to the issuer and its securities (e.g. legal position of the issuer, minimum capitalisation for shares issuers (no free float of the shares is required), period of existence of the issuer, free transferability of the securities, minimum issuance amount of EUR 200,000, etc.).
Ongoing Disclosure and Communication Obligations
As one can immediately picture, the key benefit of a listing on the SOL is to leave aside the burdensome framework created principally under the Prospectus Directive,1 the Transparency Directive 2 and the Market Abuse Regulation.3
As such, the SOL Rulebook generally requires issuers to ensure equal treatment among (i) shareholders and holders of units / shares who are in the same circumstances or in identical situations and/or (ii) all the holders of the debt securities issued within a same issue to the extent applicable to the rights attached to such securities.
Otherwise, a listing on the SOL only requires the issuer to inform the LuxSE in advance of any information relating to events affecting the securities admitted to the SOL or the issuer itself – the so-called securities and corporate events. This typically encompasses important changes in activities of the issuer or changes to its articles of association, early redemptions of debt securities, payment defaults, notices in connection with meetings of security holders and more generally any event or information which, on the date of its publication by the issuer, is likely to influence the price of the relevant securities. The issuer must equally communicate to the LuxSE at the latest at the moment of making it public information it has to disclose to the public pursuant to rules and regulations binding upon it.
Easily Accessible Information
All information related to the securities listed on the SOL and their issuers (e.g. Information Notices, price history, notices published in connection with the issuers and securities and issuers cards) are easily and freely accessible through the LuxSE’s website at https://www.bourse.lu/luxse-sol.
For further information, please contact your regular adviser at Loyens & Loeff or one of our Luxembourg capital markets team members.
1 Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading, as amended.
2 Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, as amended.
3 Regulation (EU) No. 596/2014 on market abuse.