LuxSE unveils Euro MTF EM3S: unlocking new opportunities for professional investors

I. Introduction

The Luxembourg Stock Exchange (the LuxSE) has launched a new professional segment within its Euro MTF Market: the Euro MTF Specialist Securities Segment (the Euro MTF EM3S). This segment is exclusively available to professional investors and provides an alternative trading venue for financial instruments with stronger confidentiality requirements.

The Euro MTF EM3S will admit to trading a wide range of securities (EM3S Securities) tailored for these investors. EM3S Securities may contain confidential data, proprietary information, commercially sensitive intellectual property features and may be subject to bespoke investment strategies, structures and terms which the relevant issuer may wish to protect from being made available to the wider public. As a result, the Euro MTF EM3S is designed to balance the transparency needs of investors with the confidentiality requirements of issuers. It offers a streamlined listing process with limited disclosure obligations, while ensuring compliance with LuxSE regulations and market abuse rules.

Given these features, the Euro MTF EM3S is expected to attract, among others, asset-backed securities (ABS), collateralised loan obligations (CLOs), private placements and alternative investment funds (AIFs) seeking a discreet yet reputable trading platform.

II. Listing your securities on the Euro MTF EM3S

Issuers wishing to list their EM3S securities on Euro MTF EM3S must follow the following steps and comply with the following requirements:

1. Application: they must fill out a letter of undertaking and submit an application form, which must at least include the terms and conditions of the EM3S Securities for which admission to trading is requested. The final version of the application form as well as the undertaking and any additional information must be submitted to the LuxSE within three (3) working days prior to the expected listing date.
2. Submission of information: you must provide the information specified in the LuxSE Rules & Regulations, with the exception of the draft prospectus (if any), which is not required for listings on Euro MTF EM3S. Issuers wishing to have their EM3S securities listed on the Euro MTF EM3S must, among other things, provide the LuxSE with information and documentation relating to their legal status, constitutional documents, legal representatives, a current organisational chart and information relating to anti-money laundering legislation, as may be requested by the LuxSE.
3. Provision of information: the terms and conditions relating to the EM3S Securities must be made available to eligible professional investors and potential investors upon request as soon as practicable and at the latest at the beginning of the admission to trading.
4. Reason for admission: they must provide a reason for seeking such a listing route.
5. Contact point: a security card will be created and published on the LuxSE website indicating the contact point of the issuer where investors and potential investors can obtain the terms and conditions relating to the EM3S securities. This may be a dedicated department of the issuer's organisation, the listing agent or the LuxSE.
6. Investor verification: it is the issuer’s responsibility, and not the LuxSE, to ensure that potential investors are eligible to subscribe to EM3S Securities listed on the Euro MTF EM3S.
7. Disclosure requirements: the LuxSE may waive certain disclosure requirements for EM3S Securities upon application for admission to trading on the Euro MTF EM3S; however, issuers must comply with all applicable ongoing disclosure obligations set out in the LuxSE Rules and Regulations, including those relating to market abuse.
8. Rejection of application: the LuxSE reserves the right to reject any application for certain reasons, including the suitability of the securities for admission to another market or segment of the LuxSE.

III. Key benefits for issuers listing their securities on the Euro MTF EM3S

1. No requirement to submit a prospectus: issuers are not required to submit a prospectus in order to list their securities on Euro MTF EM3S. Instead, issuers can provide the required information via the application form and the LuxSE will not provide formal approval as a prerequisite for the listing process.
2. Documents accessible only to professional investors: as the EM3S securities listed on the Euro MTF EM3S are aimed exclusively at professional investors, the transaction documents do not need to be published on the LuxSE website, thus protecting commercially sensitive information. The terms and conditions of the EM3S securities, as well as any additional information relating to the EM3S securities, will be available upon request by investors, thus ensuring transparency for eligible investors. As a professional segment, Euro MTF EM3S is not subject to any obligations and disclosures relating to retail transactions.
3. Listing option for alternative investment funds: Euro MTF EM3S could be a significant listing option for alternative investment funds whose securities are typically reserved for a limited circle of professional investors.
4. Limited disclosure: the disclosure requirements are less stringent as information relating to the offer of the EM3S securities listed on Euro MTF EM3S will not be made available to the public but only to professional, qualified and well-informed investors.
5. Admission to trading: the securities listed on the Euro MTF EM3S will be admitted to trading on the Euro MTF of the LuxSE, thus benefiting from the visibility and credibility that the LuxSE can offer issuers for their securities.