LexGo

From complexity to simplicity – the new rules and regulations of the LuxSE enter into force today
31/01/2020

The Luxembourg Stock Exchange’s new rules and regulations (the “R&Rs”) enter into force today, 31 January 2020, and will certainly be warmly welcomed by issuers and their listing agents/legal advisors. The new R&Rs can be consulted here.

The drive for change

Driven by the need to adapt to the current legal and regulatory landscape (following the entry into force of the Prospectus Regulation[1] and related amendments to national legislation) and inspired by feedback received from the market in recent years, the Luxembourg Stock Exchange (the “LuxSE”) has effectively overhauled its R&Rs, in particular Part 2 (Prospectus Approval for Admission of Securities to Trading) thereof.

Changes to Part 2

Part 2 of the new R&Rs is now significantly more “user-friendly” for those drawing up prospectuses, especially for those who are already familiar with the Prospectus Regulation. This is in particular due to the following changes:

Single prospectus regime for the listing of debt securities

There is now a single prospectus regime for the listing of debt securities on the Euro MTF[2] (whereas previously there was a distinction between prospectuses for securities offered to the wholesale market or the retail market – this now unified regime is based on the requirements of the wholesale regime);

New Building Block Appendices

  • Part 2 of the updated R&Rs now contains Appendices I to XIV which are effectively 14 building blocks setting out all relevant disclosure requirements. These will serve as a helpful checklist for persons drawing up prospectuses, similar to the annexes of the Commission Delegated Regulation (EU) 2019/980. Although it should be noted that the LuxSE does not require the submission of checklists with the application for prospectus approval.
  • There is now a single schedule/appendix for each of the following:
    • alleviated prospectuses for issuances covered by Part III, Chapter 2 of the Luxembourg Prospectus Law[3] to be admitted to trading on the LuxSE Regulated Market[4] – Appendix XIV;
    • all types of derivative securities to be admitted to trading on the Euro MTF  – Appendix VII;
    • all types of investment funds (both open and closed-ended) to be listed on the Euro MTF– Appendix XII. As a consequence, the disclosure requirements for closed-ended funds are now lighter compared to before when their prospectuses had to be drawn up in accordance with the equity schedule;
  • Part 2 also contains the very helpful “Guidelines for the Use of the Appendices”.

Short-form prospectus exemptions

  • There is now a broader scope of exemptions allowing for the use of a short-form prospectus. This regime is now available:
    • to issuers who are multilateral institutions which are not public international bodies and of which at least one OECD Member State is a member (previously only supranational issuers could take advantage of this simplified regime);
    • for securities guaranteed by a Member State, an OECD Member State or their representative regional or local authorities as well as for non-equity securities issued in a continuous or repeated manner by credit institutions.

Alleviated requirements

The new R&Rs also allow for some alleviated requirements as follows:-

  • issuers who are listed entities whose shares are admitted to trading on a Regulated Market or equivalent, are now exempted from disclosing certain information from the issuer building block; listed guarantors benefit from a similar exemption;
  • the prospectus for convertible debt and derivative securities giving the right to acquire shares can now be drawn up in accordance with the debt securities issuer disclosure regime (rather than the equity disclosure regime); it is no longer mandatory that the underlying shares are admitted to trading
  • there is now a lighter disclosure regime applicable to secondary issuances for debt securities contained within in Appendix XIII.

 

Some changes to LuxSE’s AML-CFT KYC Policy

In line with the global anti-money laundering and counter terrorism financing movement, the LuxSE has implemented a new KYC due diligence process which is reflected in Part 1 of the updated R&Rs. The practical implications for new and existing issuers are minimal. Nothing will change as regards the listing process for existing issuers but they can expect to be contacted by the LuxSE in due course, with a request from some additional information, as part of the LuxSE’s ongoing due diligence.  Going forward, new issuers will need to submit as part of their listing application, in addition to the usual application form and letter of undertaking, a completed AML/KYC form which is available here.

To sum up:

Part 0 (containing definitions), Part 1 (containing the rules for admission to trading and the Official List), Part 3 (containing the market rules) and Part 4 (containing rules of public auctions organised by the LuxSE) remain largely unchanged except to incorporate some simple and standard AML-CFT KYC requirements. On the other hand, Part 2 of the R&Rs has been amended almost beyond recognition with the result that the drawing up, review and approval of prospectuses is now more transparent, fast and efficient, much to the advantage of all concerned.

 

[1] 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, and repealing Directive 2003/71/EC (the “Prospectus Regulation”)

[2] The multilateral trading facility as defined by Article 4(1)(22) of Directive 2014/65/EU (“MiFID II”) operated by the LuxSE.

[3] Luxembourg law of 16 July 2019 on prospectuses for securities.

[4] The regulated market (“Regulated Market”) as defined by Article 4(1)(21) of MiFID II, of LuxSE (the “LuxSE Regulated Market”)

Related : Bonn Steichen & Partners ( Mr. Pierre-Alexandre Degehet ,  Mr. Laurent Lazard ,  Nuala Doyle )

[+ http://www.bsp.lu]

Mr. Pierre-Alexandre Degehet Mr. Pierre-Alexandre Degehet
Partner
padegehet@bsp.lu
Mr. Laurent Lazard Mr. Laurent Lazard
Partner
llazard@bsp.lu
 Nuala Doyle Nuala Doyle
Partner
ndoyle@bsp.li

Click here to see the ad(s)
All articles Stock exchange law

Lastest articles Stock exchange law

LuxSE prepares for ESEF (European Single Electronic Format) compliance
13/01/2020

From 1 January 2020, issuers on EU regulated markets falling under the scope of the Transparency Directive, will have to p...

Read more

LuxSE prepares for ESEF (European Single Electronic Format) compliance
01/01/2020

From 1 January 2020, issuers on EU regulated markets falling under the scope of the Transparency Directive, will have to p...

LuxSE prepares for ESEF (European Single Electronic Format) compliance Read more

PLUS: a new service offered by the Luxembourg Stock Exchange to comply with the hyperlink require...
27/11/2019

The Luxembourg Stock Exchange has launched a new service, named PLUS for Perma Link Upload Service, to help issuers in ref...

Read more

Implementation of the new prospectus regime in Luxembourg
04/09/2019

As of 21 July 2019, a new Luxembourg law on prospectuses for securities came into effect (the New Prospectus Law), re...

Read more

Lastest articles by Mr. Pierre-Alexandre Degehet

RBO filing it’s now
27/06/2019

The Luxembourg law dated 13 January 2019 (the RBO Law) created a register of beneficial owners (registre des bén&ea...

Read more

The Law of January 15th 2019 setting up a register of beneficial owners
21/01/2019

On December 6th 2017, the Luxembourg Parliament published two bills of laws (PL 7216 and PL 7217) aimed at implementing ne...

Read more

CSSF warning notice on Initial Coin Offering
16/03/2018

In a precedent newsflash dated November 16th 2017, we informed you about a press release issued by the Luxe...

Read more

Cryptocurrencies: ESMA, EBA and EIOPA alert consumers on risks of investing in cryptocurrencies
15/02/2018

By definition, a cryptocurrency or virtual currency (VC) is a digital or virtual representation of value using cryptograph...

Read more

Lastest articles by Mr. Laurent Lazard

Two new Brexit laws for the Luxembourg financial sector
01/04/2019

In anticipation of the United Kingdom leaving the European Union (or simply “Brexit” as it is more commonly re...

Read more

China Grants Luxembourg 50 Billion RQFII Quota
01/05/2015

People's Bank of China (PBoC) has announced yesterday that a 50 billion RMB quota has been granted to Luxembourg under the...

Read more

Lastest articles by Nuala Doyle

Two new Brexit laws for the Luxembourg financial sector
01/04/2019

In anticipation of the United Kingdom leaving the European Union (or simply “Brexit” as it is more commonly re...

Read more

LexGO Network