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Norway: Listing procedures update

Terje Gulbrandsen
On December 10 2014, Oslo Børs (the Oslo Stock Exchange) resolved certain amendments to the listing rules, with the new rules entering into force on January 12 2015.

Before the amendments, there had been a requirement that at the time of application for listing on Oslo Børs, the main part of the company's activities must not be in a pre-commercial phase. Directive 2001/34/EC on the admission of securities to official stock exchange listing does not contain any requirement for a company to have reached a commercial phase in order to be listed on a stock exchange, and nor is there any such requirement for any stock exchange comparable to Oslo Børs. Despite this, Oslo Børs has until now found it appropriate to apply such a requirement for listing on it.

Companies in a pre-commercial phase have been admitted to listing on Oslo Axess (a regulated market place operated by Oslo Børs, with somewhat easier listing requirements), and are admitted to listing on numerous stock exchanges and regulated markets globally. By permitting pre-commercial companies to apply for listing on Oslo Børs, the stock exchange can compete with other exchanges to attract such companies.

From January 12 2015, companies in a pre-commercial phase may therefore apply for listing at Oslo Børs, provided that the company fulfils the other listing requirements. In connection with the amendments, Oslo Børs has emphasised that the requirement of three years' activity will still apply. This requirement implies that a company applying for listing on Oslo Børs must have operated the major part of its activities for a period of three years prior to the date of application for listing. It is stated that pre-commercial companies that do not meet this requirement will not be allowed to list on Oslo Børs, but are as before free to apply for listing on Oslo Axess. Under the listing rules, Oslo Børs may grant exemptions from the requirement for three years' activity, but few exemptions have been given Oslo Børs.

A further listing requirement Oslo Børs has emphasised is that the company must demonstrate that at the planned listing date, the company will have sufficient liquidity to continue its business activities on the planned scale for at least 12 months.

The opening for listing of pre-commercial companies applies to companies within all business sectors. However, the life sciences is an area commonly singled out as having a number of companies with a large market value and high number of shareholders, even at an early phase without sustaining steady revenues. There should now be a number of such companies that may take the opportunity to apply for listing on Oslo Børs. Interesting times are ahead.

Terje Gulbrandsen

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