Banking & Finance | New rules on obligation for issuers to provide certain information to Oslo Børs in connection with share capital increases

Oslo Børs introduces new rules on obligation to provide certain information to Oslo Børs in connection with share capital increases in issuers whose shares are admitted to trading on Oslo Børs or Euronext Expand. The background for the new rules is to ensure that the prospectus rules are complied with for listing of new shares in the same share class that are already admitted to trading. The rules entail that listed issuers on Oslo Børs and Euronext Expand must ensure that they submit certain information to Oslo Børs when proposals or decisions of share capital increases are publicly disclosed. The rules will not apply to issuers on Euronext Growth Oslo. The changes will enter into force on 4 July 2024.

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Introduction

It follows from the current rules that in the event of share capital increases in the same class of shares that are listed on Oslo Børs or Euronext Expand, the new shares will automatically be admitted to trading without application as soon as the capital increase has been registered. For Norwegian companies, this means that the new shares as a main rule will automatically be admitted to trading as soon as the capital increase has been registered in the Norwegian Register of Business Enterprises. For foreign companies, this will be when the shares are validly issued under the relevant corporate legislation.

If there is a requirement for a listing prospectus, the new shares cannot be admitted to trading before the prospectus has been published. This means that the share capital increase cannot be registered before the prospectus has been published, unless the issuer has established effective mechanisms to prevent the shares from being traded on Oslo Børs/Euronext Expand. Such effective mechanisms can typically be that the new shares are registered on a separate ISIN or held in a blocked VPS-account managed by a manager of the share issue until the prospectus has been published.

Oslo Børs has decided to introduce a new obligation for issuers to provide certain information to Oslo Børs prior to admission of the new shares to trading. The issuer must complete a separate form in Oslo Børs’ issuer portal NewsPoint with further information about the share capital increase and the relevant prospectus rules.

Information to be submitted to Oslo Børs in NewsPoint

The information that must be submitted to Oslo Børs through the form in NewsPoint includes:

Type of share capital increase (rights issue, private placement, subsequent issue, etc.)
The number of shares to be issued, the issue size in percentage and the total number of shares following the share capital increase. If the exact number of new shares has not been determined, the issuer shall state the maximum number of new shares that are planned to be issued.
Link to the stock exchange notice where the decision or proposal of the share capital increase has been announced.
Expected date for the admission to trading of the new shares.
Whether a prospectus is required for the offering and/or listing of the new shares.
If there is an exemption from the prospectus requirement, the relevant exemption must be stated and the legal basis for this, e.g. where the new shares constitute less than 20% of the existing share capital calculated over a period of 12 months or in cases where the new shares are issued to employees or board members. The issuer must also submit the total number of new shares the last 12 months both in number and percentage.
In cases where there is a requirement for a listing prospectus and the issuer contemplates to register the share capital increase before the publication of the prospectus, the measures the issuer will take to prevent the shares from being traded on Oslo Børs/Euronext Expand before the prospectus has been published must be stated. This may typically be that the new shares are registered on a separate ISIN or held in a blocked VPS-account managed by a manager of the share issue until the publication of the prospectus.

Deadline for submission of the information

The obligation to submit the required information to Oslo Børs arises as soon as the issuer has published a proposal or decision on a capital increase by the board of directors, general meeting or other relevant corporate body in accordance with the applicable rule in section 4.2.4 (1) no. 3 (d) of the Oslo Rule Book II.

The requirement to publish proposals of a share capital increase by the board only applies decisions by the board to set forth proposal of a share capital increase to the general meeting or other corporate body, and not to proposals by the board that do not result in a decision to set forth such proposal. The new rules on the obligation to provide information to Oslo Børs will therefore not apply in the latter case either.

The issuer shall submit the information in NewsPoint immediately after the stock exchange notice of a proposal or decision has been published in accordance with the above-mentioned rule, and no later than three trading days before the new shares are admitted to trading. The reason for the deadlines is that Oslo Børs shall have time to verify the information about the capital increase and any prospectus requirement in that regard.

This means, for example, that in cases where the board of directors decides to set forth a proposal of a share capital increase to the general meeting, the issuer must submit the information in NewsPoint immediately after the stock exchange announcement about such proposal has been published. The same will apply when the board resolves a share capital increase pursuant to a board authorization.

The issuer must as a main rule ensure that the decision to increase the share capital and the subsequent registration is planned in such a way that the issuer is able to comply with the obligation to inform Oslo Børs no later than three trading days before the new shares are admitted to trading. If, for example, the issuer needs to register the share capital increase within a certain deadline, and the decision of the share capital increase shall be made by the board of directors pursuant to a board authorization, the issuer must ensure that the decision by the board is made no later than three trading days before the planned registration of the share capital increase and the shares thereby are admitted to trading.

If the issuer needs to register a share capital increase earlier than three trading days after the proposal or decision of the capital increase has been published, it is possible to apply for an exemption from the deadline of three trading days, still so that the information must be submitted to Oslo Børs immediately after the proposal or decision of the share capital increase has been published.

Application for such exemption must be submitted by telephone to the Market Administration Department (+47 22 34 19 45) in due time ahead of the planned admission to trading of the new shares. This will typically be the case where a decision of a share capital increase is made by the board of directors pursuant to a board authorization, and the issuer plans to register the share capital increase one or two trading days after this. This may for example be relevant for certain private placements where there is a need to have the new shares admitted to trading as soon as possible after the private placement has been placed.

According to the new rules, the required information about the share capital increase shall not be submitted to Oslo Børs through NewsPoint before the matter has been made public in accordance with Oslo Rule Book II section 4.2.4 (1) no. 3 (d).

Entry into force

The new rules will enter into force from 4 July 2024. The rules will apply to issuers with shares or equity certificates admitted to trading on Oslo Børs or Euronext Expand, including issuers who also have the shares admitted to trading on other marketplaces (duallisting). The rules will not apply to issuers on Euronext Growth Oslo. The rules will not apply to initial listings of shares on Oslo Børs or Euronext Expand, as the shares are then admitted to trading pursuant to an application for listing.

The amendments entail an amendment of Oslo Rule Book II sections 4.2.5.5 and 4.8.4.4 and updated guidance to these provisions. Oslo Børs will also issue a separate Notice setting out further requirements for the information to be submitted and the procedure for this. These documents are available on Oslo Børs’ website under “Consultations”.

Concluding remarks

The new rules will apply to all share capital increases in the same class of shares that are already listed on Oslo Børs or Euronext Expand, and it is therefore important that issuers implement routines to ensure that the required information about the share capital increases is submitted to Oslo Børs through the form in NewsPoint within the specified deadlines.

Issuers that plan to register a share capital increase earlier than three trading days after the proposal or decision of the share capital increase has been published must also ensure that they apply for an exemption from Oslo Børs regarding the maximum deadline for submitting the information well in advance of the publication of the proposal or decision of the share capital increase.

It is still the issuer which must assess whether an offer or listing of new shares will trigger a prospectus requirement, but the new rules will be a control mechanism at Oslo Børs to ensure that the rules are complied with prior to admission to trading of the new shares on Oslo Børs or Euronext Expand.