Key Takeaways
- The Luxembourg Stock Exchange has just introduced a new segment to its Euro MTF market: the Euro MTF Specialist Securities Segment, which is dedicated to sophisticated financial instruments offered to a limited number of professional investors.
- This innovative new segment allows issuers the opportunity to list securities on the Euro MTF market operated by the Luxembourg Stock Exchange while keeping a high degree of confidentiality.
The Luxembourg Stock Exchange ("LuxSE") recently introduced the Euro MTF Specialist Securities Segment ("EM3S"), expanding its offer of listing possibilities to meet the diverse needs of issuers and investors.
As a reminder, the LuxSE operates two markets where a broad range of debt and equity securities (including shares or units of investment funds) may be listed and traded: (i) the Bourse de Luxembourg, an EU-regulated market within the meaning of MiFID II¹, giving issuers with securities admitted to trading on this market the possibility for those securities to also be traded on other regulated markets of the European Union by virtue of the EU 'passport'; and (ii) the Euro MTF, an exchange-regulated domestic market that qualifies as a multilateral trading facility within the meaning of MiFID II, which does not offer issuers the benefit of the EU passport but offers more flexible requirements (for example only the LuxSE needs to approve the prospectus contrary to the regulated market which requires approval of the prospectus by the CSSF), making it more attractive for issuers seeking a more streamlined listing process. As a consequence, the Euro MTF is usually preferred by investment managers and promoters looking for easy access to the EU market.
The LuxSE also operates the Securities Official List ("LuxSOL"), where issuers can list their securities without admission to trading on the regulated market or the Euro MTF.
In addition, securities listed on the regulated market, the Euro MTF or the LuxSOL can be displayed on the Luxembourg Green Exchange ("LGX") if the securities are eligible for being labelled as green, social or sustainable.
The EM3S is a new segment of the Euro MTF dedicated to issuers of sophisticated financial instruments, allowing them to offer such securities only to a limited circle of professional investors. The EM3S has a number of features designed to appeal to issuers of sophisticated financial instruments, such as limited disclosure rules and no publication of documents by the LuxSE. Consequently, issuers will have the benefits of being listed on the Euro MTF without having to publicly disclose their investment strategy or other sensitive information. This lighter touch disclosure regime is likely to appeal to issues of alternative investment funds, collateralized loan obligations, asset-backed securities, private placements, high-yield instruments and structured investment products, as promoted by the LuxSE.
The EM3S sits alongside the existing professional segment of the Euro MTF, which allows issuers to offer their securities only to Professional Clients or Qualified/Well-Informed Investors².
It should be noted that the rules and regulations of the LuxSE were amended in March 2025 to reflect the changes brought by the introduction of the EM3S.
In practice, to apply for admission to EM3S, issuers would need to complete and submit to the LuxSE:
- one of three new application forms, tailored to the type of security to be listed (no prospectus would be required, and relevant information can be provided directly in the form, along with the terms and conditions of the security). The application form should include a reason for selecting EM3S and a designated contact point for investors, such as the issuer's email, mandated agent's email or LuxSE (which could take this role); and
- a letter of undertaking specific to EM3S.
The AML/KYC process remains mandatory and unchanged. Once admitted, securities would be displayed on the LuxSE's website with only the information required for MiFID II reporting and the contact point for investors. Issuers would be responsible for disclosing information to eligible investors upon request.
Conclusion
The LuxSE's introduction of the EM3S is likely to increase the attractiveness of the Euro MTF market and, more generally, of the LuxSE as a venue for listing securities of any type issued by Luxembourg or foreign issuers. The EM3S is of particular interest to issuers of complex financial instruments targeting professional investors and looking to keep information about their investment strategy or specific terms of the offered securities confidential and to protect their know-how.
Please contact us if you have any questions about listing any type of securities on any of the platforms offered by the LuxSE.
Footnotes
- Directive 2014/65/EU of 15 May 2014 on markets in financial instruments, as amended.
- As defined in the rules and regulations of the LuxSE, itself referring to the definitions of (i) MiFID II for Professional Clients, (ii) Regulation (EU) 2017/1129 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 (the Prospectus Regulation) for Qualified Investors and (iii) the Luxembourg legislation on alternative investment funds for Well-Informed Investors.
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.
