The official EU Regulated Market (Bourse de Luxembourg) and the alternative market (Euro MTF Market, implemented in 2005) offer different possibilities to issuers. Both are regulated but there are differences of interest to issuers:
- financial and other reporting obligations are more stringent on the Bourse de Luxembourg;
- the prospectus must meet the law of July 10 2005 on Prospectuses for Securities (Prospectus Law) requirements if listed on the Bourse de Luxembourg; and
- transparency and financial reporting obligations (initial and ongoing) are less burdensome on the Euro MTF market.
Under the Prospectus Directive of November 4 2003 (PD) and the Luxembourg Prospectus Law of July 10 2005 which implemented the PD, issuers that have obtained approval for prospectuses in one member country of the EU may use the same prospectus for listing in another country. The securities can only be listed on the regulated market once the Commission de Surveillance du Secteur Financier (CSSF) has approved the prospectus and notified the relevant authority.
For programmes and series to be listed under a programme, the same applies, but the base prospectus must contain the Final Terms. The CSSF must receive the Final Terms but will only provide recommendations and suggestions on the content. It will not review nor approve the Final Terms for Listing.
Listing on the Euro MTF has been the market of choice for many foreign issuers. The Luxembourg Stock Exchange (LuxSE) is the regulator approving the prospectus (not the CSSF) and is known to be accommodating, helping issuers to list expeditiously. The reporting and disclosure obligations (both financial and transparency) are not as stringent and the EU regulations do not apply. The downside is that there are no passporting privileges if an issuer lists on this market.
Luxembourg is an attractive and accessible market for both international issuers and investors. A Luxembourg listing has many advantages to offer non-EU companies seeking to raise capital and to claim a greater share of the attention of international investors worldwide. These benefits include:
- access to a large pool of international investment capital;
- access to a high proportion of institutional funds;
- a liquid and active secondary market in international equities;
- worldwide visibility for international companies through dedicated screen-based trading systems;
- a flexible and cost-effective means of raising capital;
- high and well-respected standards of regulation;
- a range of products equities, depositary receipts and debt issues, units in funds to meet the varied capital raising requirements of different issuers;
- the ability to passport these securities through to different EU member states by mere notifications (if listed on the EU regulated Bourse de Luxembourg); and
- reasonable listing fees charged by the LuxSE.
In addition, Luxembourg is attractive because:
- it provides skilled services to issuers and their intermediaries;
- it pays careful attention to the implementation of important EU directives;
- it has made a priority of ensuring a smooth transposition of the Markets in Financial Instruments Directive (Mifid);
- it has the ability to recruit knowledgeable international staff with enhanced language capabilities to offer support for international issuers (such as listing and paying agent functions); and
- the LuxSE has a reputation for high professionalism and having a quick turnaround time, which enables issuers to get their securities or units issued in a relatively short period of time under flexible conditions.
Pamela Gonzales de Cordova
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