By opening the new market, Oslo Børs aims to provide an alternative market in which the regulatory framework can largely be ‘tailor-made’ to meet the requirements of Norwegian market participants. Oslo Børs hopes that this will create a structure for secondary trading to take place in a regulated manner with satisfactory transparency for all players in a way that is not possible in an un-listed market.
The process of applying for admission to listing on the alternative market will be somewhat simpler than for listing on the main stock exchange. Once a bond issue is admitted to listing, the issuer will be subject to a duty to provide information largely the same as for the stock exchange market. The information requirement will help to ensure that brokers and investors have a good basis for trading at fair prices. There will in addition be a requirement for continuous reporting of transactions carried out in the secondary market that will help to ensure openness about secondary market activity, and this is also important information for market players.
New EU directives will lead to further changes in the regulatory framework for the stock exchange market. The new requirements for listing and trading in stock exchange listed instruments will be stricter than at present, especially for issuers of fixed-income securities. The directives will include new requirements for prospectuses and the introduction of IFRS accounting with effect from 2007, and will be implemented in Norway. The new alternative market is seen as an attractive alternative for issuers who believe that the new requirements imposed by the EU directives will be unnecessarily comprehensive.
Oslo Børs has today circulated draft regulations for the new marketplace for consultation, and the last date for responses is 1 April 2005.
The implementation date is expected to be in June.
Background information:
The Norwegian fixed-income market is currently largely a professional investor market. Private individuals accounted for less than 4% of total outstanding bonds at the close of 2004. This investor structure largely dictates the market's requirements and expectations for issuers, both in terms of the information provided in connection with new issues and the information provided during the life of an issue.
There is considerable variation between issuers, both in terms of the sectors they represent and their size. Oslo Børs believes that this is one of the strengths of the Norwegian bond market since it plays an important role in the freedom of choice for investors in terms of the investments they wish to make.
