The Luxembourg Stock Exchange (LuxSE) has published, today, its latest version of its Rules and Regulations (R&R).

Changes in the R&R to accommodate the migration of clearing service provider

LuxSE is currently undergoing a migration of selected financial instruments admitted to trading on the markets of LuxSE from Banque Centrale de Compensation S.A. (LCH) to another clearing organisation.

As part of this process, LuxSE identified the need to adjust the existing wording of the Rules of the R&R pertaining to the appointment of the provider of clearing services for LuxSE, to ensure that such processes occur with more efficiency, while maintaining all due transparency and safety of LuxSE’s Members and markets.

This materialises in a change in Rule 2041.A.1 of the R&R where the appointment of a clearing organisation will not be made by having a reference to a concrete institution in the R&R, but rather by means of a Notice to be published on LuxSE's website and communicated among Members in written form.

Changes in the R&R and LuxSE's Trading Manual to ensure compliance with CSDR and render LuxSE's processes more efficient

LuxSE is attentive to the latest modifications in EU Law, such as the revision of the Central Securities Depositories Regulation (CSDR), in particular its settlement discipline regime. The relevant provisions of CSDR have been reflected in Rule 5305.4 of the R&R, outlining the cases in which the settlement discipline regime, in particular the buy-in, shall not apply.

In addition, LuxSE takes this opportunity to update the R&R and its Trading Manual (TM) with regards to the buy-in, by also aligning to CSDR and current market standards.

In practice, LuxSE is slimming down relevant Rules of the R&R and creating two new sections in the TM: Buy-in process and sell-out process. These processes function as a mirror for each other, accommodating for cases where potential fails are caused by the seller, and by the buyer, respectively.

Changes to the TM Professional Segments Appendix

LuxSE is introducing one amendment to the TM Professional Segments Appendix, aimed at improving certainty for LuxSE's Members in a process that promotes fair and orderly trading and the efficient execution of orders. Concretely, the process that is in place for the cases where Members wish to access a trading group - in which case LuxSE always ensures that all requisites are fulfilled before authorising such access – remains unchanged.

Changes to the R&R related to internal Compliance Procedures

Aiming at providing a framework for the various phases of the process to enter into a relationship, monitor the relationship, and end the relationship with a candidate Member of LuxSE, LuxSE took this opportunity to update Rule 2402 of the R&R. The change in Rule 2402 introduces a more targeted approach of performing ongoing due diligence with a periodicity based on the identified level of risk of a Member.