A fast mover on technological innovation in capital markets, the Luxembourg Stock Exchange (the "LuxSE") has decided to allow security tokens to be registered on its Securities Official List (the "SOL").
For the avoidance of doubt, and in accordance with the current EU regulatory framework, security tokens/ instruments issued using distributed ledge technology ("DLT") will not be admitted to trading on the regulated Bourse de Luxembourg market or on the Euro MTF.
Criteria to be fulfilled for registration of crypto-assets on the SOL
In what the LuxSE refers to as a "first phase", only experienced issuers or those with a proven track record who are issuing debt financial instruments (i.e. crypto-assets that qualify as financial instruments pursuant to Article 4(1), point (15) of MiFID II) can be admitted to the SOL. These securities must be priced in fiat currency. Furthermore, in order to be registered on the SOL, offers of the DLT securities must be limited to qualified investors (within the meaning of the EU Prospectus Regulation) or issued in wholesale denominations (i.e. at least EUR100,000 per unit).
Guidelines for the application to register DLT financial instruments
General information on how to apply for admission of securities to the SOL is available in the LuxSE SOL Rulebook available at this link. This Rulebook describes in detail the mandatory data to be included in the required information notice (the "IN").
The LuxSE has now published new guidelines available here which specify the additional information which must be included in an IN for DLT financial instruments.
LuxSE has pre-emptively published frequently asked questions – FAQ – addressing specific questions around the admission of security tokens to the SOL. Conveniently, Luxembourg's financial regulator, the CSSF, has also very recently published a whitepaper providing guidance on the implementation of a DLT project.
If you require further information or advice in respect of a potential admission of security tokens to the SOL, please reach out to our capital markets team.