The Luxembourg Stock Exchange now offers issuers the possibility to admit their securities to trading on a professional segment (each a “Professional Segment”) of each of its two markets, the BdL market (the EU-regulated market) and the Euro MTF market (Exchange-regulated market).
Trading on these Professional Segments is only allowed between professional investors and therefore securities admitted to trading on a Professional Segment will not be accessible to retail investors.
What are the benefits?
- Pursuant to 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 “New Prospectus Regulation”), by admitting their non-equity securities only to a Professional Segment of the BdL Market, the issuers of those non-equity securities can avail of the (i) exemption from the requirement to include a summary in the related prospectus (ii) lighter disclosure requirements within that prospectus and (iii) more flexible language requirements for that prospectus.
- With respect to the product governance requirements under Directive 2014/65/EU of 15 May 2014 on markets in financial instruments (“MiFID II”) which oblige issuers to identify and communicate to distributors, a compatible target market of investors and periodically review that target market, admission of securities on a Professional Segment is an easy way of demonstrating that an issuer is not targeting retail investors.
- Issuers who, pursuant to Regulation
(EU) 1286/2014 on key information documents for packaged retail and insurance-based investment products (the “PRIIPs KIID Regulation”) would be required to prepare a key information document (“KIID”) if targeting retail investors, can now, by admitting their “packaged products” to trading only on a Professional Segment, easily demonstrate that these products are not intended for retail clients and therefore that no KIID is required.
As a consequence of the introduction of the Professional Segments, the rules and regulations of the Luxembourg Stock Exchange have been updated accordingly and the updated version can be found here. Likewise, updated application forms for admission to trading on both markets of the Luxembourg Stock Exchange are now available for downloading here; these have been updated to include an option for admission to the Professional Segments.