Euronext and the Luxembourg Stock Exchange today announced the signature of Master Agreement(1) giving concrete form to an agreement for mutual cooperation established during prior discussions between the two parties.
This agreement will lead to the creation of a European Economic Interest Grouping (EEIG) from April 2007, bringing together as its first members the two founders - Euronext and the Luxembourg Stock Exchange. The EEIG's purpose will be to develop a shared standard for listing and trading corporate bonds through the use and promotion of a comprehensive, integrated solution based on leading-edge technology.
Concretely, from the second quarter of 2007, all securities listed on the Luxembourg Stock Exchange will be available on NSC, the single pan-European trading platform used by all Euronext cash markets. This will give Euronext members access to nearly 40,000 instruments traded on the Luxembourg Exchange, including 29,000 bonds issued by more than 4,000 entities in over 100 countries.
In parallel, during the second quarter of 2007, Euronext will adopt the SAGE services and listing tools used by the Luxembourg market for the listing of corporate debt instruments.
This fruitful tie-up between Euronext and the Luxembourg Stock Exchange will establish a genuine European standard for both the listing and trading of corporate bonds. Called LuxNext, the new standard will:
- Enable issuers to use the admission standards and procedures adopted by Europe's leading market for the listing of corporate bonds
- Give investors access to a full and varied range of products in the corporate debt segment, available on Europe's most liquid market
Through the new EEIG, Euronext and the Luxembourg Stock Exchange will join forces to promote and develop LuxNext across Europe, backed by targeted marketing tools.
Initially dedicated to corporate bonds and selected debt products (ABS, CDOs, covered bonds, mortgage bonds and TCNs), the agreement will in time be extended to other products.
Jean-François Théodore, Chairman of the Managing Board and CEO of Euronext, commented: "Just one year after discussions first began between our exchanges, Euronext and the Luxembourg Stock Exchange are taking the initial agreement one step further. With this new agreement, we will soon be able to offer a European standard for listing and trading corporate bonds."
Raymond Kirsch, Chairman of the Board of Directors of the Luxembourg Stock Exchange, said: "Our tie-up with Euronext reflects an entrepreneurial strategy aimed at consolidating our technological and commercial resources to create a shared label covering operations linked to corporate bond issues on the one hand, and make best commercial use of the results of our combined efforts in this area on the other."
(1)Pending authorization from the relevant regulatory and competition authorities.