Published: May 2017Contents
i) What are the hot topics?
Several of the earliest exchanges are still at the forefront of the global IPO market, such as the NYSE and LSE, however, the world’s major stock exchanges now are scattered around the globe, and many of them are now public companies themselves.
Aside from general globalisation, shifting investor sentiment and economic, political and regulatory factors have also influenced the development and evolution of the global IPO market. For example, markets in the Asia-Pacific region, including Hong Kong, Shanghai and Tokyo, have enjoyed a significantly stronger presence in the global IPO arena in recent years owing to economic growth in the Asian markets.
ii) Tell us about any key legal developments – recent or pending – and their international impact.
Virtually all markets around the globe have experienced significant volatility in recent years. In 2016, the uncertainty surrounding the US presidential election, the unexpected outcome of the Brexit vote and numerous other geopolitical issues facing regions throughout the world furthered the general decline in both overall deal count and proceeds raised. Moving forward, however, many regions have a healthy IPO pipeline for the coming 12 months, including many household names.
In the United States, in June 2017, the House of Representatives passed the Financial CHOICE Act of 2017 which is intended to reverse many provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The bill contains a number of changes intended to reduce regulatory burdens and facilitate greater access to the capital markets. It is unclear what action the U.S. Senate will take.
In March 2017, to adjust for inflation, the SEC raised the annual gross revenue threshold to qualify as an “emerging growth company” (EGC) from $1 billion to $1.07 billion.
iii) What are the biggest opportunities and challenges for practitioners and clients?
Every exchange operates with its own set of rules and requirements for conducting
an IPO. Country-specific regulatory landscapes are often dramatically different between
jurisdictions as well. Whether a company is looking to list in its home country or is exploring
listing outside of its own jurisdiction, is it important that the company and its management
are aware of the requirements from the outset as well as potential pitfalls that may derail
the offering. Moreover, once a company is public, there are ongoing jurisdiction-specific
disclosure and other requirements with which it must comply.