European IPO Task Force launches report on how to improve conditions for European IPO markets
The new European Commission has taken office and has set out an ambitious work programme. When it comes to supporting the economy, policy measures to address the declining numbers of initial public offerings (IPOs) on European markets should be a top priority.
This report outlines the issues at stake and presents policy recommendations to reverse the trend and addresses policy-makers, regulators and market participants at the European and national level. In particular it offers input to the European Commission’s strategy on small and medium-sized enterprise capital market financing, particularly the private-public fund initiative to support IPOs.
The number of IPOs on European markets has been falling for more than 20 years, with consequences for society. Markets that have a higher share of equity financing are better equipped to handle economic shocks, create jobs, allow investors to participate in the value creation of fast-growing companies, and allocate more funding towards a sustainable economy. The European economy should thus be less reliant on bank-based financing. Moreover, the current environment where fewer companies decide to list on public markets leads to less transparency as private companies are not subject to the same reporting requirements.
This report provides an overview of issues that companies, investors, exchanges and other market participants are facing in trying to promote companies’ access to capital market financing and suggests measures to address these challenges.
The European IPO Task Force is composed of corporate representatives and independent experts from major segments of the financial sector involved in the admission of companies to listing. Accountancy Europe, CFA Institute, EBRD and FESE took the lead in relaunching the European IPO Task Force to assess recent developments in IPO markets and take stock on the outcomes of the recommendations provided by the original European IPO Task Force in 2015. See FESE website for more information.
