EM3S Allows Securities Admission Without CSD Recording

April 2, 2026

LuxSE’s EM3S Allows Admission To Trading Without A CSD

Déborah Kirmann, Pierre-Henry Maroteaux, Frank Mausen, Roman Mazhorov, Caroline Motzer, Philippe Noeltner, Paul Péporté, Alexis Poisson, Max Sassel, David Van Gaever, Eugène Welter A&O Shearman + Follow Contact LinkedIn Facebook X Send Embed

New option for securities to be admitted on the Euro MTF's EM3S Segment

The Luxembourg Stock Exchange (LuxSE) Euro MTF Specialist Securities Segment (EM3S) covering both debt and equity instruments now allows securities to be admitted to trading without being recorded in a central securities depository (CSD) at the time of admission.

EM3S is a professional segment of the Euro MTF ringfenced from retail investors, offering enhanced confidentiality, including no publication of initial disclosure documents and only MiFID‑mandatory fields shown on the LuxSE website. Information is made available to eligible investors on request via a designated contact point.

What is new?

The LuxSE has updated its Rules & Regulations to allow EM3S securities to be recorded in the following forms:

• Dematerialized form in a system maintained by the issuer
• Dematerialized form in a system maintained by a third party (e.g., a registrar)
• Book-entry form in a CSD (traditional option) Where a trade occurs on venue, the securities must be recorded in a CSD on or before the settlement date, in line with Article 3(2) of the Central Securities Depositories Regulation (CSDR). Accordingly, CSD recording is not required at the point of admission to trading but must be completed prior to settlement of the first trade.

This update gives issuers more flexibility, reduces operational constraints, and is particularly suited to securities where secondary market trading is not a primary consideration.

Admission process

EM3S offers a streamlined and documentation‑light admission route, operating on an application‑based model without the need for formal prospectus approval. Admission is based on an application form and a commitment letter in the LuxSE's standard format, which must set out the securities’ terms and conditions, issuer information, and organizational structure, and be accompanied by constitutional documents and any additional information the LuxSE may request (including AML/KYC documentation where appropriate). The issuer specifies the form of securities recording at admission and, where on‑venue trading is anticipated, confirms and undertakes that CSD recording will be completed by the settlement date of the first trade.

The final submission must be made at least three business days before the targeted listing date. The LuxSE's review typically takes two to three business days, allowing issuers to achieve swift access with limited disclosure documentation. After admission, only MiFID‑mandatory identifiers are published; eligible investors may request terms and conditions via a designated contact point. The issuer remains responsible for investor verification and ongoing obligations, including compliance with market abuse rules.

The LuxSE has aligned its settlement rules with CSDR, recognizing that the standard T+2 settlement cycle does not apply to the first on-venue trade to the extent that trade involves the initial recording of the securities in a CSD.

Why this matters for issuers

The new EM3S option delivers three core benefits: (i) timing flexibility, (ii) confidentiality control, and (iii) a streamlined settlement framework.

First, issuers of securities not yet recorded with a CSD can achieve a listed status on the EM3S within days rather than weeks, allowing for the listing timeline to be tightly synchronized with corporate and agency processes, without the delays of a prospectus approval cycle or upfront CSD onboarding.

Second, the EM3S confidentiality regime means that transaction documents are not published on the LuxSE website. Only MiFID mandatory identifiers appear, and the terms and conditions are made available to eligible investors on request through a designated contact point. This addresses IP sensitivity and commercial confidentiality concerns common in bespoke structures.

Third, there is no obligation to have securities recorded in a CSD until an on-venue trade is planned. This lowers the entry barrier for securities with expected low liquidity and allows issuers to prepare CSD connectivity on a “just-in-time” basis, reducing upfront operational and cost burdens.

These advantages—in particular the ability to admit securities to trading without prior CSD recording—are particularly relevant to securitization projects. The following are illustrative scenarios:

• Registered bonds issued by SPVs to a single bondholder—rapid confidential listing with an issuer- or registrar-maintained register of bonds
• Securitization warehouse facilities—flexible interim infrastructure before pool finalization
• Private ABS/CLO tranches—controlled document access for narrow investor bases
• Corporate private placements to bank clubs—Euro MTF listing efficiency without prospectus or CSD setup costs
• Project bonds with single off-takers—compressed timelines with confidential commercial terms
• NAV financing instruments—limited public visibility with lean registrar-based recording In all cases, the recording method must align with the governing law and the recordkeeping system's capabilities. Issuers should reserve adequate lead-time for CSD onboarding before the settlement date of the first on venue trade.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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