LuxSE and the EM3S (Euro MTF Specialist Securities Segment)

The Luxembourg Stock Exchange (“LuxSE”) announced the launch of the Euro MTF Specialist Securities Segment (“EM3S”). The EM3S presents a new opportunity to list and admit to trading complex or more sophisticated financial instruments (“FIs”) for professional and well-informed investors, offering a faster application process and less stringent procedures for admission to trading. The EM3S entitles issuers to admit to trading specific FIs such as structured investment products, collateralized loan obligations (CLOs), asset-backed securities (ABS), high-yield instruments, and shares or units of alternative investment funds (AIFs). The EM3S may also be used for confidential data, proprietary information, and commercially sensitive intellectual property features protected from the public.

Objectives and benefits of the EM3S

The EM3S entitles the listing and admission to trading on the Euro MTF without the submission of a prospectus, with a streamlined submission process for such FIs and issuers willing to protect commercially sensitive information. It provides security, confidentiality, and protection while being accessible to professional investors and well-informed investors, and transparent enough for such types of investors. The disclosure obligations are quite limited, yet compliance with the Market Abuse Regulation and the LuxSE Rules and Regulations is required.

As there is no approval of the prospectus for the FIs, neither by the LuxSE nor by the CSSF, no formal prior approval, review, and back-and-forth comments will delay the admission to trading of the FIs, enabling the issuer to focus on the commercial and practical aspects of its project.

There is no transaction document published on the LuxSE, and the terms and conditions of the FIs to be admitted to trading on the EM3S, as well as any related additional information, are only available upon request as the EM3S is a professional segment of the Euro MTF. The availability of FIs on the EM3S for professional and well-informed investors presents an important opportunity for capital raising purposes by inter alia AIFs, such as RAIFs, SICARs, and SIFs.

Procedure:

• Application and submission of information: An application form including the required provisions for admission to trading on the EM3S is required, along with a letter of understanding specific to the EM3S, both to be finalised at least 3 business days before the admission to trading date. Information to be submitted to the LuxSE is the one required in the Lux SE Regulations, except the prospectus, which is not required. The terms and conditions of the FIs to be admitted on the EM3S are to be added to the application form. Regarding the units of AIFs, a short description of the investment policy, strategy, risk factors and criteria of each class to be admitted to trading is required. LuxSE also requires a short explanation of the reasons for using the EM3S.
• Contact point, ISIN, and LEI: a respective security card will be created and displayed on LuxSE’s website, which will include the issuer’s contact point where investors and potential investors can request the terms and conditions pertaining to the EM3S FIs. The contact point may also be the listing agent or the LuxSE. An ISIN is required for the FIs to be admitted to trading on the EM3S, and a LEI is required for the issuer.
• Investor verification: LuxSE is not responsible for verifying whether clients or potential investors are qualified to operate in the EM3S.
• Compliance with LuxSE Rules and Regulations and the Market Abuse Regulation: compliance with all disclosure obligations set out in the LuxSE Rules and Regulations, including those relating to market abuse and the Market Abuse Regulation, is required from the issuers.

Entry into force

The EM3S is already open and available on the LuxSE. The submission of the application file may be done on the LuxSE’s website.

For further information or advice on how to list and admit to trading your financial instruments on the EM3S, please contact our investment management regulatory team.