[Last updated: 1 January 2024, unless otherwise noted]
The application process in brief
Nasdaq Stockholm's Rule Book for Issuers (the Rule Book) stipulates that the applicant issuer must prepare itself and establish that it will be able to comply with the listing requirements well in advance of the listing. This is a multi-step application process where the issuer is subject to a review. The review process includes, but is not limited to, the issuer's business, profitability, policies, ability to comply with listing requirements and tax situation. In addition, a legal due diligence must be conducted by a legal advisor. The due diligence also includes preparation of documented procedures for all material events of the issuer, corporate governance, significant agreements, conduct in relation to competition laws and other similar legislation.
Furthermore, in accordance with the (EU) Prospectus Regulation, a prospectus must be prepared and approved by the SFSA prior to an offering to the public and for the admission to trading on Nasdaq Stockholm. When an issuer requests Nasdaq Stockholm to initiate an admission review, a fee must be paid to Nasdaq Stockholm and the issuer is required to appoint a Listing Auditor. The Listing Auditor conducts a review as to whether the issuer fulfils the admission requirements and whether it would be appropriate to approve an issuer and its shares for admission to trading on Nasdaq Stockholm. All "Big 5" audit firms (EY, KPMG, Deloitte, PWC and Grant Thornton) are entitled to conduct the listing review. The Listing Auditor prepares a report for the issuer including a recommendation in respect of Nasdaq Stockholm’s assessment of the issuer’s fulfilment of the admission requirements. The complete application, including the prospectus, is reviewed by Nasdaq Stockholm's Listing Committee which decides on the approval of the application. Formally, the Listing Committee is a subcommittee of Nasdaq Stockholm AB's board of directors, although half of its members represent external interests. The documentation upon which the Listing Committee bases its decisions consists primarily of the report provided by the Listing Auditor and the applicant's prospectus. The Listing Committee normally convenes once a month but may decide to convene additional meetings upon request from an applicant. The Listing Committee can also make an advance ruling regarding the listing requirements.
An issuer applying for a listing may, in exceptional cases, be deemed as unsuitable for listing even though it fulfills the listing requirements. This could be the case when Nasdaq Stockholm, in its sole discretion, deems that the listing of the issuer's shares may damage the public confidence in the securities market. Nasdaq Stockholm may, however, in special circumstances approve an application for listing even though the listing requirements have not been satisfied by waiving the relevant requirement. These waivers are granted under the condition that Nasdaq Stockholm is assured that the purpose and objective behind the waived requirement is not compromised or if the purpose and objective is satisfied by other means.
Formal requirements
In order for an issuer to list its shares on Nasdaq Stockholm, it must be duly incorporated or otherwise validly established under the relevant laws of its jurisdiction of incorporation or establishment. The issuer's shares must be freely transferable and negotiable and must conform to the laws of the issuer's jurisdiction of incorporation. If the issuer's articles of association include limitations on the transferability of the shares, such limitations would generally be regarded to restrict transferability. Other arrangements with a comparable effect may lead to a similar interpretation and the issuer must then remedy such arrangements prior to listing. Further, the listing must cover all issued shares of the same series. Subsequent issues of new shares of the same series must also be listed.
Accounts and operational history
An issuer must have a clear business strategy and be able to demonstrate ongoing business operations. The issuer’s business operations must have a sufficient operating history. The issuer must also be able to demonstrate its operations over time in order for the exchange and investors to make an informed assessment of the development of the business. Account will be taken of the issuer’s development over time. If the issuer's operations have moved into a new phase or stage, the issuer could still be considered to meet the requirement for sufficient operating history if this is part of a natural development of the business. On the other hand, recent material changes in the issuer’s operations may lead to the requirement on sufficient operating history not being fulfilled.
An issuer must have published consolidated annual accounts for at least three years in accordance with the accounting laws applicable to the issuer in its home jurisdiction. The evaluation of the issuer's accounts and operating history must, if applicable, also cover the issuer's subsidiaries. At least the two last years' annual reports of the issuer should be prepared in accordance with IFRS. There should be sufficient information in the financial reports for Nasdaq Stockholm and investors to evaluate the development of the business and to form an informed judgement of the issuer and its shares as an investment.
Profitability and working capital
An issuer must demonstrate that it has sufficient working capital on a business group level available for its planned business for at least 12 months after the first day of trading. In this context, “sufficient working capital” means that the issuer must demonstrate that it is able to access cash and other available liquid resources in order to meet its liabilities as they fall due for at least 12 months from the first day of trading. The working capital requirement can be fulfilled through injection of capital raised in connection with the listing or other binding commitments of financing.
In terms of demonstrating the existence of sufficient working capital to Nasdaq Stockholm and investors for the 12 months following the listing, various factors may be considered. These may include cash-flow estimates, planned and available measures for financing (such as the proceeds from an offering in connection with the listing), descriptions of the planned business investments, and well-informed assessments of the future prospects of the issuer. It is important that the basis for the issuer's well-informed assessment is clearly stated. Despite such financing, the requirement is not considered to be fulfilled in a case where, for some other reason, the issuer's financial status is extraordinary or threatened. This may be the case where, for example, an issuer is restructuring, or a similar voluntary financial recovery process has taken place.
Liquidity
A prerequisite for trading on Nasdaq Stockholm is that there is a satisfactory demand and supply for the financial instrument in order to support reliable price formation in connection with trading in the share. A sufficient number of financial instruments shall be considered as being distributed to the public when 25% of the financial instruments within the same class are in public hands or at least 10% of the issuer's shares within the same class are in public hands as long as the value of the aforementioned shares is at least SEK 500 million (approximately US$49.55 million). In addition, the issuer's shares must be held by at least 500 qualified shareholders. Shareholders individually holding shares with a value of at least €500 (approximately US$553) are considered qualified shareholders. If, however, the number of qualified shareholders is less than 500, but more than 300, Nasdaq Stockholm may consider this requirement satisfied if the issuer retains the services of a liquidity provider. The assessment of whether the above requirement is fulfilled is based on various factors and may include previous trading history.
The term "public hands" means a person who directly or indirectly owns less than 10% of the issuer’s shares or voting rights. All holdings by natural or legal persons that are closely affiliated or are otherwise expected to employ concerted practices in respect of the issuer shall be aggregated for the purposes of the calculation. All holdings of members of the board and the executive management of the issuer, as well as any closely affiliated legal entities such as pension funds operated by the issuer itself, are not considered to be publicly owned. When calculating financial instruments that are not publicly owned, shareholders who have pledged not to divest their financial instruments during a protracted period of time (so-called lock-up) are included. However, Nasdaq Stockholm may accept a lower percentage than 25%, if the requirement for a properly operating market is satisfied with a lower percentage in view of the large number of shares that are distributed to the public. Once the shares are admitted to trading, Nasdaq Stockholm will continuously assess whether sufficient liquidity exists. Additionally, the expected aggregate market value of the shares (in connection with an initial listing on the exchange) must be at least €1,000,000 (approximately US$1.11 million or SEK11.20 million).
Organizational requirements
The board of directors of the issuer shall be composed in such a way that it possesses the competence required to manage a listed issuer and has the ability to comply with the obligations of the issuer. Thus, it is important that the directors have an adequate degree of experience and knowledge regarding the special requirements for listed issuers. It is equally important that directors understand the demands and expectations to which listed issuers are subject. Members of the board and the management should know the issuer and its business and be familiar with the way the issuer has structured its internal reporting lines, the management pertaining to financial reporting, its investor relation management and its procedures for disclosing ad hoc and regular information to the stock market.
The board of directors and members of management will normally be deemed to be familiar with these circumstances if they (i) have been active in their respective current positions of the issuer for at least three months and (ii) have participated in the preparation of at least one annual or other financial report issued by the issuer prior to the listing. In addition, Nasdaq Stockholm considers it important that all directors and members of management have a general understanding of stock exchange rules, in particular such rules directly attributable to the issuer and its listing. Such understanding may be acquired by participating in one of the seminars regularly offered by Nasdaq Stockholm or by attending an equivalent seminar held by a law firm with competence within capital markets law.
All listed issuers must have a CEO who is appointed by the board of directors and employed by the issuer. The CEO may not be the chairman of the board of directors. The issuer must also have at least one authorized auditor. Appointments of managing directors, board members and auditors must be made public as soon as possible.
Well in advance of the listing, the issuer must establish and maintain adequate procedures and control systems (including systems and procedures for financial reporting and disclosure of inside information) in order for the issuer to comply with its obligation to provide the market with timely, reliable, accurate and up-to-date information.