- Listing of open-ended investment funds
The admission to trading in Luxembourg is an easy and straightforward process once the funds vehicle complies with its home state requirements.
Open-ended funds may be listed on either the regulated market or on the alternative market, the Euro MTF. Once accepted by their home authority prospectuses of open- ended funds are accepted for Luxembourg listing.
Criterion for open-ended type
The Luxembourg criterion for determining whether a fund is to be viewed as open- ended is very simple as it is sufficient that investors benefit from a redemption option on certain redemption dates.
Rules are flexible regarding the free float requirements, a handful of investors is sufficient.
- Listing of closed-ended investment funds
Listing conditions for closed-ended funds are subject to additional distinctions to be made: a) between EEA funds and third country funds, and b) the market on which the shares/units are intended to be listed.
EEA closed-ended funds
- Regulated Market
The Luxembourg Prospectus Act applies to listings of EEA closed-ended funds. This means that funds which already received approval from their home Member State under the Prospectus Directive may use this approved prospectus for the admission to trading on the Regulated Market. The CSSF will only receive notification of the approval by the competent authority of the home Member State and will not make any further checks on such prospectus.
- Euro MTF
For listings on the Euro MTF, the Luxembourg Stock Exchange will review the prospectus before approving it.
- Third country closed-ended funds
For third country closed-ended funds, a prospectus shall be approved by the CSSF (for listings on the regulated market with EU passport) or by the Luxembourg Stock Exchange (for listings on the EuroMTF).
- Free Float
To list closed-ended funds, the same free float requirement as for commercial or operational companies applies, meaning 25% of free float and a minimum number of investors, generally in the range between 20 and 30.
- Listing of Luxembourg limited partnerships
Luxembourg limited partnership are eligible for listing on the Luxembourg Stock Exchange.
- Regulatory, settlement and governance aspects
The prospectus may be drafted in English, French or German.
Securities must be freely transferable and clearable via the Clearstream/ Euroclear systems.
The mere listing in Luxembourg of a non-Luxembourg alternative fund, be it open- ended or closed ended, is not viewed as marketing in Luxembourg and accordingly does not trigger any license or reporting requirements under the Luxembourg AIFMD
Luxembourg does not impose additional local corporate governance rules on foreign funds listed in Lux but accepts the rules of the fund's home jurisdiction.
IFRS (or equivalent accounting standards) is only required if a listing on the regulated market (benefiting of the EU passport) is sought.
- Disclosure requirements
The scope of disclosure will depend on i) whether the securities are listed on the Euro MTF or on the regulated market (with EU passport) and ii) whether the issuer is an open-ended or a closed-ended fund.
The Regulated Market (with EU listing passport) falls within the scope of the Luxembourg Transparency Act (implementing the EU Transparency Directive). Therefore issuers of closed-ended funds with Luxembourg as their "Home Member State" shall comply with reporting and disclosure obligations under the Transparency Act. There are two types of information to be disclosed: (i) periodic information (e.g. annual and semi-annual reports), and (ii) ongoing information (e.g. disclosure of major holdings). In addition, issuers are subject to the publication of some technical and market information as described in the listing rules.
Open-ended funds do not benefit from the EU listing passport and are outside the scope of the Transparency Act. Nevertheless the obligations set forth by the Listing Rules do apply.
Shares/units listed on the Euro MTF are outside the scope of the Transparency Act. Nevertheless, other or similar disclosure/reporting obligations (set out in the Listing Rules) apply to issuers of shares and units admitted to trading on the Euro MTF. This applies for both closed-ended and open-ended regulated funds.
Luxembourg is an attractive listing place for Luxembourg and foreign investment funds.
In particular the EuroMTF market of the Luxembourg Stock Exchange attracts international issuers, including investment funds. It is easy, accessible and quick. The Luxembourg Stock Exchange typically reverts back within a couple of days following an applications.