On September 27th 2016, the Luxembourg Stock Exchange launched the Luxembourg Green Exchange (LGX), a new platform dedicated exclusively to green financial instruments (so far, only green bonds). LGX is not a new market but rather compliments the two existing markets of the Luxembourg Stock Exchange. The goal of LGX is to raise the bar for disclosure on green securities; it should boost investor trust in the green market by providing the means for investors to have access to information relating to the use of proceeds of green securities in a transparent and efficient way. For the issuers, it allows them the possibility to raise awareness of their on-going green projects.
Access to LGX is limited to issuers who comply with strict eligibility criteria:
- before applying to join LGX, the green bond must first be listed on either the EU regulated market of the Luxembourg Stock Exchange or the exchange-regulated Euro MTF market;
- the bond must be labelled as green or equivalent;
- the use of proceeds from the issuance must be disclosed, and that use must be exclusive to financing or refinancing projects which are 100% green;
- issuers must provide an external review from a third party before applying to join the LGX (which may be in the form of a second opinion, certification, verification or rating report); and
- issuers must commit to regular reporting (on a qualitative and/or quantitative basis) on the use of proceeds from the security throughout its lifecycle.
LGX will not be accessible to securities relating to nuclear power production, trade in CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora), animal testing for cosmetic and other non-medical product, medical testing on endangered species and fossil fuels.
All securities on LGX are displayed on the website of the Luxembourg Stock Exchange at https://www.bourse.lu/green-bonds-trading. Issuers wishing to list a green bond shall send an email to bolide@bourse.lu.
