Luxembourg: Offshore Business Sectors
The Luxembourg Stock Exchange was founded in 1929 and lists equities, investment fund shares and, especially, Eurobonds. Current issuance and listing procedures were laid down in a Grand-Ducal regulation of 28th December 1990, with some subsequent amendments. Luxembourg listing regulations conform to the EU Listings Directive. Supervision of the Stock Exchange and trading markets is in the hands of the Commission for the Supervision of the Financial Sector under the law of 23rd December 1998. The Exchange lists both Luxembourg and foreign stocks and bonds.
The Exchange launched its quote-driven 'On-Demand Continuous Market' (MCD) in 1997, and in 1998 began a dialogue and cross-exchange membership programme with the Amsterdam and Brussels exchanges. These discussions culminated in an agreement between the three exchanges and Euronext to create a pan-European ecn, signed in November 2000.
Trading is fully electronic and decentralized. Since 2 January 1996 all the Luxembourg-listed securities have been traded on the Multi-Fixing (MFX) segment of the Automated Trading System SAM. The securities are distributed over a number of fixing groups called in sequence within a fixed time schedule. On completion of the call the prices are validated and the generated trades are confirmed immediately to the market participants.
The Luxembourg Stock Exchange announced in 2004 that it was finalizing the implementation of a regulatory framework which would allow for the admission of non-EU undertakings for collective investment.
The EU's Directive 2003/71/EC relating to securities prospectuses was transposed into Luxembourg law in 2005.
In 2009, the Luxembourg Stock Exchange maintained its dominant position for the listing of international securities, compared to its main competitors. However, in general, listing activity in 2009 experienced a significant slowdown as a result of the situation on the international capital markets since September 2008.
2009 was marked by a sharp decline in the admission of securities representing securitized assets or structured products. In contrast, bond issues from non-financial enterprises rose sharply. In this regard, the amount of capital raised and listed during 2009 increased by about 8.17% compared to 2008 to breach the symbolic barrier of EUR1 trillion, while the number of new quotation lines was lower by almost 35% over the previous year.
During 2012, the Luxembourg Stock Exchange admitted 8,121 new securities to trading and to its official list on both of its markets with the following breakdown: 6,954 securities were admitted to trading on the “Bourse de Luxembourg” regulated market and 1,167 on the Euro MTF market. Securities newly admitted to trading were divided as follows: bonds (5,274 lines), investment funds (640), depositary receipts including Global Depositary Receipts (16) and warrants (2,191).
As at 31 December 2012, the Luxembourg Stock Exchange listed 42,061 quotation lines compared to 44,369 in 2011. The largest segments remained bonds with two-thirds of the total, followed by warrants (18%), investment funds (15%) and shares (1%) of lines.
Several studies on IPO activity carried out by consultants have highlighted the expertise of the Luxembourg Stock Exchange in the field of international IPOs. The Luxembourg Stock Exchange figures in the top three worldwide stock exchanges (behind London and New York) in terms of amount issued and in terms of number of new listings.