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

April 2018 - Finance. Legal Developments by Chevalier & Sciales .

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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 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

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 at https://www.bourse.lu/luxse-sol.