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Since the launch of the Capital Markets Union Plan in 2015 the number of European IPOs has decreased. The European IPO Task Force, alarmed by these statistics, reformed in 2019 to address what needs to be done to reverse this trend. The 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 that European policy makers could implement in order to address these challenges.
The Report recognises six key issues that require attention including:
• IPO ecosystems be improved, specifically for companies and investors?
• investors’ participation in IPO markets be improved?
• a European equity culture be created?
• tax incentives for investment in IPOs and equity be implemented?
• a regulatory framework that favours technological innovation be created?
• capital markets be supported in the transition to a sustainable economy?
Caroline Nagtegaal, Member of the European Parliament (VVD/Renew Europe) and Chair of the European IPO Task Force said:
“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. This report can help policymakers in deciding what needs to be done to improve our IPO markets’
Further information for the Editor:
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. In addition, the Task Force has assessed developments related to sustainable finance, new technologies and developments in CEE markets.
Accountancy Europe unites 51 professional organisations from 35 countries that represent 1 million qualified accountants, auditors and advisors. Qualified accountants make numbers work for people. As Accountancy Europe, we translate their daily experience from across Europe to inform the European policy debate. We do this in the areas in which our profession can contribute most, namely: Sustainable Finance, SMEs, Tax, Reporting and Audit.
Good decisions start with reliable information. Qualified accountants measure, disclose and add credibility to organisational data to support decisionmakers in the public and private sectors. They provide the transparency, trust and integrity that help markets function. They are, as such, essential for the smooth functioning and integration of European capital markets.
CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion of ethical behavior in investment markets and a respected source of knowledge in the global financial community. Our aim is to create an environment where investors’ interests come first, markets function at their best, and economies grow. There are more than 170,000 CFA charterholders worldwide in 162 markets. CFA Institute has nine offices worldwide, and there are 158 local member societies.
European Bank for Reconstruction and Development (EBRD)
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. The Bank is owned by 69 countries as well as the European Union and the European Investment Bank. EBRD investments are aimed at making the economies in its regions competitive, well-governed, green, inclusive, resilient and integrated.
This report was prepared with contributions by the EBRD’s Local Currency and Capital Markets Development Initiative (LC2), which aims to promote more efficient and self-sustaining financial markets through the development of local capital markets and broader use of local currencies.
Federation of European Securities Exchanges (FESE)
The Federation of European Securities Exchanges (FESE) represents 36 exchanges in equities, bonds, derivatives and commodities through 19 Full Members from 30 countries, as well as 1 Affiliate Member and 1 Observer Member.
At the end of November 2020 FESE members had 8,838 companies listed on their markets, of which are foreign companies. Many of our members also organise specialised markets that allow small and medium sized companies across Europe to access the capital markets; 1,342 companies were listed in these specialised markets/segments in equity, increasing choice for investors and issuers.