Jersey: Listing Of Debt Securities In Luxembourg

The Luxembourg Stock Exchange (LuxSE) is the world's number one exchange for the listing of international securities with a market share of 40% of international securities listed in Europe and 20% of international securities listed worldwide.

This document gives an overview of the general listing rules applicable to companies wishing to admit their debt securities to trading on the LuxSE.

Two markets available

The LuxSE operates a regulated market designated as the "Luxembourg Stock Exchange" (the Regulated Market) and a multilateral trading facility designated as "Euro MTF" (the Euro MTF Market).

Unlike issuers admitted to trading on the Euro MTF Market, issuers admitted to trading on the Regulated Market may avail of the passport procedure under the 2003/71/EC Prospectus Directive to have their securities admitted to trading on a regulated market of another EU Member State.

The Euro MTF Market is directed to issuers that are interested only in preparing basic international financial reports and that solely wish to list in Luxembourg. It is outside the scope of some EU regulations including (i) the 1606/2002/EU Regulation on application of international accounting standards (IAS), (ii) the 2003/71/EC Prospectus Directive and (iii) the 2004/109/EC Transparency Directive. Issuers having securities admitted to trading on the Euro MTF market are bound by less costly and less stringent requirements for financial reporting (eg. audited financial statements for issuers that are special purpose vehicles are not necessarily required).

Listing process

The different phases of a listing can be summarised as follows:

• step 1: planning, including gathering the requested financial information
• step 2: preparation of the prospectus
• step 3: finalisation and filing of submission
• step 4: listing and admission to trading
• step 5: after the listing - ongoing disclosure requirements (eg. corporate event notice, regular reporting requirements)

The intervening parties are usually:

• the listing agent who assists the issuer with the application procedure set out in the LuxSE's Rules and Regulations and the fulfilment of its ongoing disclosure obligations (generally appointed by the arranger of the securities issue)
• the transfer agent who records changes of ownership of the listed securities
• the paying agent who administers the payment of interest, redemptions, dividends and other distributions

Listing requirements

The table below summarizes the requirements for the listing of bonds on any one of the markets operated by the LuxSE.

Approval of the Prospectus

No offer of securities shall be allowed to be made to the public within the territory of Luxembourg without prior publication of a prospectus. Any admission of securities to trading on the Regulated Market or on the Euro MTF Market is also subject to the publication of a prospectus.

While an application for the listing of bonds on the Regulated Market will require the prior approval by the the Luxembourg supervisory commission of the financial sector (Commision de Surveillance du Secteur Financier - CSSF), of a prospectus drawn up in accordance with the 809/2004/EC Regulation on prospectus, an application for a listing on the Euro MTF Market will require the prior approval by the LuxSE of a prospectus drawn up in accordance with the LuxSE's Rules and Regulations.

In terms of information required in the listing document, the following must be covered:

• information concerning the persons responsible for the prospectus and the auditing of accounts
• risk factors
• information concerning the admission to trading and the units for the admission of which application is being made
•             general information about the issuer and its capital
•             information concerning the issuer's activities
•             information concerning the issuer's assets and liabilities, financial position and profits and losses (accounts, subsidiaries...)
• information concerning administration, management and supervision

Audited annual accounts for the last three years will generally be required, although there are various exemptions available. An interim financial statement covering at least the first 6 months is also required if the last annual accounts are older than 9 months.

Ongoing and periodic reporting and disclosure obligations

After a listing and admission to trading, issuers are subject to specific requirements for information disclosure.

Listing fees / costs

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.