Frequently Asked Questions - Transaction structure

Transaction structure

Frequently asked questions on getting listed on our cash markets

What is an IPO?

IPO stands for Initial Public Offering. An IPO involves a company offering its shares to the public for purchase. Following an IPO, the company is listed and its shares are traded on the stock exchange. As part of an IPO, the issuer obtains the assistance of a Listing Agent (Euronext) or Listing Sponsor (Euronext Growth). Generally the structure of the IPO encompasses two investors types: retail and institutional investors.

What is an Open Price Offer (“OPO”)?

The OPO is the tranche of an IPO open to subscriptions from retail investors during a pre-determined period of time at the indicative price range. The final issue price is set by the institutional investors within the Global Placement open in parallel to the OPO. The price range can be modified if the company has explicitly provided for this possibility in the prospectus. If the price is set outside the indicative price range, a new subscription period must be launched. In Belgium and France, 10% of global offering shall be allocated to the OPO. In France and Portugal, Euronext is responsible for centralising the results of the OPO. Upon request, Euronext may also perform centralisation services in Belgium and the Netherlands.

What is a Fixed Price Offer (“FPO”)?

The Fixed Price Offer is a tranche of an IPO opened to subscriptions from retail investors during a period of time where the issue price is pre-determined by the issuer. Whatever the number of shares requested, the fixed price is applied.

What is a private placement?

A private placement is an offer of securities which are not sold through a public offering but rather through a private offering, mostly aimed at pre-determined categories and/or numbers of investors (e.g. insurance companies, banks, investment funds, pension funds). Private placement is chosen when issuers want to avoid the complexities of a public offering. It may also comprise a method to raise additional capital for non-listed companies that do not wish to undergo a full IPO process and relevant offering.

What is a direct listing on Euronext?

A direct listing is an admission to trading on a regulated market of Euronext for securities already admitted to trading on another regulated market or a market recognized as equivalent by Euronext and without the relevant issuer raising capital by conducting a public offer or a private placement. The regulatory procedure will depend on the issuer’s location of incorporation.

Within a simultaneous listing, an EU issuer may also seek to use the passporting procedure to list on one or more Euronext regulated markets i.e. using a prospectus that has been approved by another EU Competent Authority. In these circumstances the Competent Authority will rely upon the EU passport to satisfy the requirement for an approved prospectus. The relevant Competent Authority must be provided with a certificate of approval, a copy of the approved prospectus and, if applicable, a translation of the summary of the prospectus in a language accepted by the Competent Authority.

An EEA already listed issuer seeking a secondary listing on one or many Euronext regulated markets may also benefit from a prospectus exemption if securities of the same class have been admitted to listing and trading on that other regulated market for more than 18 months. If the issuer has been admitted to listing and trading for less than 18 months and has issued a prospectus within the last 12 months, the existing prospectus must be updated. If no prospectus has been issued within the last 12 months, the reference document together with a securities note must be supplied to the relevant Competent Authority.

For non-EEA incorporated issuers, a prospectus approved by the Competent Authority of the market location may be required. However simplified regulatory process may be available through the Fast Path procedure. Fast Path enables US- listed issuers, incorporated outside the European Economic Area, to use their US Securities and Exchange Commission (“SEC”) filings for the listing on one of our continental markets (Amsterdam, Brussels, Paris or Lisbon). The process is straightforward, fast, cost-efficient and is a simplified way to access European investors and strengthen global presence.

What is a direct admission on Euronext Growth?

A direct admission is an admission to trading on an Euronext Growth market for securities already admitted to listing and or trading on one of the eligible markets and without the relevant issuer raising capital by conducting a public offer or a private placement. The eligible markets are specified in the Euronext Growth rule book.

What is a technical admission on Euronext Access?

A technical admission is an admission on Euronext Access without the relevant issuer raising capital by conducting a public offer or a private placement. An issuer, even if not already listed, can apply for a technical admission on Euronext Access.

What is the Fast Track procedure on Euronext Growth?

The Fast Track procedure allows an issuer already admitted to trading on a regulated market located in the European Economic Area or one of the eligible organised markets such as the markets operated by the NYSE, the Toronto Exchange, Nasdaq-OMX (see the list of eligible markets in Euronext Growth Rule Book) to benefit from a fast and simplified procedure when seeking a direct admission to trading on Euronext Growth. The Fast Track procedure is also available for an issuer admitted to trading on Euronext Access or Euronext planning a transfer to Euronext Growth.

The issuer must meet the general application requirements including the public equity ownership requirement of €2.5 million (see Euronext Growth Rule Book). The application must feature a detailed description of the shareholder base and notably demonstrate that shares have already been placed in public hands for a minimum amount of €2.5 million through their home market (For further details see FAQ question: How do I calculate my free float for market transfer?)

What is Fast Path on Euronext?

Fast Path enables US-listed issuers, incorporated outside the European Economic Area, to use their US Securities and Exchange Commission (“SEC”) filings for the listing on one of our continental markets (Amsterdam, Brussels, Paris or Lisbon). The process is straightforward, fast, cost-efficient and is a simplified way to access European investors and strengthen global presence. Ongoing compliance is satisfied with existing SEC filings (Forms 10-K, 10-Q and 8-Ks or 20-F and 6-Ks for Foreign Private Issuers) plus a summary wrapper. No additional corporate governance or accounting obligations are required. The overall process takes approximately six weeks, once SEC documentation is available. On approval by the Competent Authority and Euronext, the shares or DRs can be listed having a US dollars, Euro or any eligible currencies quotation.

Can I list on more than one of your markets?

Yes, you can list on more than one market operated by Euronext. A multi-listing will not entail a fragmentation of the liquidity as the issuer benefits from the Single Order Book (SOB) made available to multi-listed issuers on Euronext or Euronext Growth.

The Single Order Book designates a single trading line for all Euronext securities listed in Europe, and a single trading code for most. Issuers may choose to list on more than one market to enhance visibility, qualify for inclusion in local indices, or have trading volumes and prices published in the national press, the Single Order Book will execute their trades on one trading line: the designated Market of Reference (MoR). The Single Order Book is available for multi-listed Issuers on Euronext markets in Amsterdam, Brussels, Paris and London where transactions are settled in Euroclear. This excludes transactions on Euronext Lisbon where transactions settled by Interbolsa.

What if my company is already listed on another stock exchange but would like to be listed on Euronext?

A company listed on a market not operated by Euronext can decide to list on a market operated by Euronext. The regulatory procedure will depend on the issuer’s location of incorporation.

Within a simultaneous listing, an EU issuer may also seek to use the passporting procedure to list on one or more Euronext regulated markets i.e. using a prospectus that has been approved by another EU Competent Authority. In these circumstances the Competent Authority will rely upon the EU passport to satisfy the requirement for an approved prospectus. The relevant Competent Authority must be provided with a certificate of approval, a copy of the approved prospectus and, if applicable, a translation of the summary of the prospectus in a language accepted by the Competent Authority.

An EEA already listed issuer seeking a secondary listing on one or many Euronext regulated markets may also benefit from a prospectus exemption if securities of the same class have been admitted to listing and trading on that other regulated market for more than 18 months. If the issuer has been admitted to listing and trading for less than 18 months and has issued a prospectus within the last 12 months, the existing prospectus must be updated. If no prospectus has been issued within the last 12 months, the reference document together with a securities note must be supplied to the relevant Competent Authority.

For non-EEA incorporated issuers, a prospectus approved by the Competent Authority of the market location may be required. However simplified regulatory process may be available through the Fast Track and Fast Path procedure. For further details, see FAQ: What is the Fast Track procedure? What is the Fast Path procedure?

If my company is listed on one of your exchanges, is it listed on all of them?

No, the issuer must explicitly request a multi-listing on markets operated by Euronext in the appropriate application form.

Can I go public (list) without a public offering?

Yes, going public does not mean that you have to issue and/or sell shares to the public. A company can decide to go public (list) through a private placement or a direct admission to listing and trading (without selling shares to the public on the market) under certain conditions. An approved prospectus will always be required for an admission to listing and trading on the regulated market. However, on Euronext Growth market, an approved prospectus will only be required in case of a public offering.

What is the difference between a spin-off and a carve-out?

A spin-off is a separation of a division or a subsidiary from the parent company to create a new stand-alone corporate entity by issuing new shares. The new shares are then distributed to the current shareholders in proportion to their current shareholdings in the parent company. A carve out is a situation in which a parent company sells a minority share of its subsidiary, usually in an IPO, while retaining the rest. On listing, the subsidiary will be an independent company.

What is centralisation?

In the context of public offerings, Euronext Paris and Euronext Lisbon perform centralisation services to issuers by collecting (i) shares tendered by retail investors within a tender offer, and (ii) subscription orders by retail investors in IPOs. This centralisation function is provided by Euronext pursuant to local laws. Other centralisation services may be provided on a case-by-case basis, whether in France and Portugal or in Belgium and the Netherlands.

What does trading on an “If- and-when-issued/delivered” basis mean?

Also known as conditional dealing, “If-and-when-issued/delivered basis” trading refers to trading securities that have not yet been effectively issued and/or delivered. This possibility of trading securities not issued and/or settled is only available on the regulated market. The sale or purchase is made conditionally because the security has been authorised but not yet issued. Unless otherwise specified, the securities will be admitted to trading on an If-and-When-Issued/Delivered basis for a maximum period of time not exceeding the standard settlement cycle of T+2.

What are Depositary Receipts?

Depositary Receipts (“DRs”) are negotiable certificates issued by a depositary bank evidencing ownership in the underlying shares of a foreign company. The depositary bank holds the foreign company’s securities underlying the receipts. DRs entitle their holders to all dividends and capital gains on the underlying shares. Generally, US banks and trusts issue American Depository Receipts (ADRs) or American Depository Shares (ADS). US and European banks and trust companies usually issue global depository receipts (GDRs), which are receipts in the shares of global offering of a non-US issuer who has issued two securities simultaneously in two markets, usually publicly in non-US markets and privately in the US market. European banks and trust companies generally issue European depository receipts (EDRs), sometimes called continental depository receipts (CDRs) when issued in bearer form, which evidence ownership in non-EU securities.

In what currencies can I list my securities on your markets?

You can list your securities in several available currencies on Euronext. Currencies other than Euros (EUR) are acceptable provided that they are eligible to settlement by the relevant Central Securities Depository. The following currencies are generally accepted on Euronext and Euronext Growth:

CODE ISO

NAME

NUMBER OF DECIMAL ALLOWED

AUD

Australian dollar

2

CAD

Canadian dollar

2

CHF

Swiss franc

2

DKK

Danish Krone

2

EUR

Euro

2

GBP

Pound Sterling

2

HKD

Hong Kong dollar

2

HUF

Hungarian Forint

2

ISK

Icelandic króna

0

JPY

Japanese Yen

0

MXN

Mexican Peso

2

NOK

Norwegian Krone

2

NZD

New Zealand dollar

2

PLN

Polish Zloty

2

RON

Romanian Leu

4

SEK

Swedish Krona

2

TRY

Turkish Lira

2

USD

United States Dollar

2

ZAR

South African Rand

2

This list is non-exhaustive. For further details, please visit the website of the relevant Central Securities Depository