Published: 16.11.2022 Updated: 13.06.2024

Issuers are companies that have their transferable securities, such as stocks, bonds and notes, offered to the public or traded on regulated markets, i.e. exchanges.

An offer to the public is usually accompanied by the listing of securities on a stock exchange, but it can also occur without such a listing. Additionally, existing shareholders can list the company's securities on an exchange without a public offer.

If an issuer offers its stocks or bonds to the public without their stock exchange listing, the buyers of these stocks or bonds should be aware that there will be no trading platform to easily find a buyer or purchase additional securities should they choose to do so.

If a company wishes to increase its fixed capital, it publicly offers stocks to attract new shareholders to the company. If a company wishes to borrow funds, it publicly offers bonds, notes or other debt securities.

The main preconditions for entering the capital market include good corporate governance (for a detailed description, see the Corporate Governance Code), well-organised other internal processes, including in financial governance, a good reputation and increasingly strong Environmental, Social, Governance (ESG) practices which testify to a company's collective sense of responsibility towards social and environmental aspects.

Offer of securities to the public

An offer of securities to the public means a communication to the public in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities. The provisions for an offer of securities to the public are stipulated in the Financial Instrument Market Law.

1. In the case of an offer of transferable securities to the public with a total consideration in the European Union not exceeding 1 000 000 euro over a period of 12 months.

2. In the case of an offer of transferable securities to the public with a total consideration in the European Union ranging between 1 000 000 and 8 000 000 euro over a period of 12 months, provided that such an offer is not subject to notification in accordance with Article 25 of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (hereinafter the "Prospectus Regulation"), the offeror may be exempt from the obligation to produce the prospectus referred to in the Prospectus Regulation.

Instead, the offeror produces and publishes an offer document in accordance with the regulatory provisions.

An issuer or offeror may also produce a prospectus on a voluntary basis, regardless of the total amount of transferable securities issued or the exemptions stipulated in the Prospectus Regulation.

1. In the case of an offer of securities addressed solely to qualified investors.

2. In the case of an offer of securities addressed to fewer than 150 natural or legal persons per Member State, other than qualified investors.

3. In the case of an offer of securities whose denomination per unit amounts to at least 100 000 euro.

4. In the case of an offer of securities addressed to investors who acquire securities for a total consideration of at least 100 000 euro per investor, for each separate offer.

5. In other cases stipulated in Article 1(4) of the Prospectus Regulation. The said exceptions may be combined, for instance, when an offer of securities is addressed solely to qualified investors or natural persons who acquire securities for a total consideration of at least 100 000 euro.

Benefits of becoming an issuer

The issue of corporate securities offers competitive advantages in the following key areas:

  • no collateral is required to receive capital;
  • the company has the potential to attract a wide range of investors, both domestic and international. In the event of a securities issue, these investors may be granted the opportunity to participate in a democratic process to help decide on strategic development goals from various perspectives;
  • when seeking investors in the capital market, a company organises its corporate management and other internal processes to appeal to potential investors;
  • successful admission to trading on the capital market represents a company's quality mark, showcasing its excellent reputation, while also serving as a free marketing tool, subject to regulatory requirements for disclosure of information;
  • the credit institution sector offers fewer opportunities than the capital market. For instance, in the event of crisis, companies can successfully attract financing from capital markets to support their further development;
  • it presents an opportunity to draw in capital, including more affordable capital, to support lending to riskier business projects as well as projects in lower-priority sectors;
  • a loan from a credit institution often provides an opportunity to influence the core activities of a company, including its dividend policy, development plans, and more.

Raising capital on the stock exchange not only provides financial resources but also amplifies the visibility of the company, promoting its reliability as it operates under the quality mark of an exchange. Companies may choose to list their stocks or bonds on the Regulated Market or the First North alternative market.

Selecting the right market

Admission of securities to trading on the regulated market is governed by the Financial Instrument Market Law and the terms and conditions of the regulated market operator. The regulated market, given its significantly higher admission requirements, is better suited for large, experienced companies. Meanwhile, the alternative market is more tailored to smaller companies as it has lower admission requirements.

For more information, see Nasdaq Baltic website.

Admission of securities to trading on a regulated market

A prospectus shall be drawn up and approved by Latvijas Banka for the admission of securities to trading on a regulated market regardless of the volume of the issued transferable securities.

In the cases referred to in Article 1 (5) of the Prospectus Regulation.


Prospectus

Prospectus is a legal document describing the main business activity, finances and the shareholder structure of a company. The potential investors rely on this document to make decisions regarding the acquisition of the company's securities.

1. Requirements for producing the prospectus are stipulated in the Prospectus Regulation.

2. Requirements for the format and content of the prospectus are stipulated in Commission Delegated Regulation (EU) 2019/980of 14 March 2019.

3. Requirements for the key financial information in the summary of a prospectus are stipulated in Commission Delegated Regulation (EU) 2019/979of 14 March 2019.

4. Guidelines on disclosure requirements under the Prospectus Regulation of the European Securities and Markets Authority

5. Information on risk factors is included in the prospectus according to the Guidelines on disclosure requirements under the Prospectus Regulation of the European Securities and Markets Authority.

6. Language:

  • if the offer to the public is made only in Latvia, the prospectus is produced in Latvian;
  • if the offer to the public is made in Latvia and in one of the Member States, the prospectus is produced in English, with a summary translated into Latvian and the official language of the other Member State where the public offer is made;
  • if admission of transferable securities to trading on the regulated market is requested solely in Latvia, the prospectus is produced in Latvian.

Offer to the public

The produced prospectus is submitted to Latvijas Banka for approval to obtain permission from Latvijas Banka to offer securities to the public.

An offer to the public involves issuing securities and publicly offering them to investors, typically followed by their admission to a stock exchange listing.

Obtaining permission to offer securities to the public and approving the prospectus

Latvijas Banka decides on granting permission to make an offer to the public and on approval of the prospectus.

Requirements for obtaining permission and approving the prospectus

To receive permission to make an offer to the public, the issuer or offeror submits an application to Latvijas Banka, along with the following documents:

1) two originals of the prospectus and the text of the prospectus in an electronic form with a search function;

2) a decision by the offeror on the issuance and the offer of the respective transferable securities, where the offer to the public is made by a legal person;

3) a cross reference list identifying where the information required in the Annex to the Prospectus Content Regulation can be found in the prospectus;

4) information on the contact person with whom Latvijas Banka's employees can communicate regarding the review of the submitted prospectus.

The documents are submitted to Latvijas Banka by e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.

To approve a prospectus, the issuer or offeror asking for the admission of transferable securities to trading on the regulated market submits an application to Latvijas Banka, along with the following documents:

1) two originals of the prospectus and the text of the prospectus in an electronic form with a search function;

2) a decision by the issuer's duly authorised managing body on the admission of the respective transferable securities to trading on the regulated market;

3) a cross reference list identifying where the information required in the Annex to the Prospectus Content Regulation can be found in the prospectus;

4) information on the contact person with whom Latvijas Banka's employees can communicate regarding the review of the submitted prospectus.

The documents are submitted to Latvijas Banka by e-mail This email address is being protected from spambots. You need JavaScript enabled to view it..

Time limit for the review of applications

Latvijas Banka reviews the application for obtaining permission to offer securities to the public or the application for registering the prospectus and takes the relevant decision within 10 business days upon receipt of all required documents prepared and presented in compliance with the regulatory requirements. Latvijas Banka is entitled to extend the time limit for the review of an application to up to 20 business days, where an offer to the public involves transferable securities of an issuer that has no transferable securities admitted to trading on the regulated market and that has not previously offered transferable securities to the public.

Review of an application for the admission of financial instruments to trading on the regulated market

An issuer or a person asking for the admission of transferable securities to trading on the regulated market submits an application for the admission of financial instruments to trading on the regulated market to Nasdaq no later than three months following the registration of the prospectus with Latvijas Banka.

Nasdaq takes a decision on admitting financial instruments to trading on the regulated market within 10 days of receiving an application from the issuer or offeror requesting the admission of transferable securities to trading on the regulated market. Within that period, the regulated market operator is entitled to request that the issuer or the person asking for the admission of transferable securities to trading on the regulated market submits additional information pursuant to the regulations governing the operation of the respective regulated market. In this case, the 10-day time limit starts from the day the additional information has been submitted to the regulated market operator.

The regulated market operator takes a decision on admitting the transferable securities of an issuer registered in a Member State to trading on the regulated market only after the registration of the prospectus with Latvijas Banka or upon receipt of a confirmation of the registration of the prospectus from the supervisory authority or the regulated market operator of the respective Member State.

A decision by Nasdaq on refusing to admit financial instruments to trading on the regulated market may be appealed to Latvijas Banka within 30 days of the receipt of the decision.

Contact details

Phone: +371 67022619 and +371 67022649 – on matters related to obtaining permission and approving and drawing up a prospectus.

Phone: +371 67022124 and +371 67022627 – on matters related to including financial information into the prospectus.

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