As of September 27 2016, the Luxembourg Stock Exchange (LuxSE) has a new specific platform for green financial instruments: the Luxembourg Green Exchange (LGX).
Any type of issuer can join the LGX, as long as the entry requirements are fulfilled. However, access to the LGX will be refused for certain non-green securities. The LuxSE provides a non-exhaustive list of projects that will not be admitted, such as those involving nuclear power production, protected fauna and flora and fossil fuels.
Joining the LGX is optional and it can be joined in addition to the LuxSE's regulated market or the Euro MTF market. There are no additional fees associated with joining the LGX; however, issuers will incur the cost of the additional reporting obligations.
The following admissibility criteria must be considered by issuers that want to list their green securities on the LGX:
- Self-labelling as a green instrument or equivalent – during the application process, the issuer must clearly indicate the green nature of the relevant securities.
- Use of proceeds – the proceeds obtained from an LGX listing must be used exclusively for financing or refinancing projects that are 100% green.
- Ex ante review and ex post reporting – issuers must supply an independent external ex ante review and ex post report.
Green securities can be listed on the LuxSE and recognised as green regardless of whether the issuer chooses to join the LGX. However, having securities admitted to the LGX will increase investor confidence as to their green nature.
For further information on this topic please contact Josée Weydert or Diana Konrad at NautaDutilh Avocats Luxembourg Sàrl by telephone (+352 26 12 29 1) or email ([email protected] or [email protected]). The NautaDutilh Avocats Luxembourg Sàrl website can be accessed at www.nautadutilh.com.