We have reached an important moment for PrimaryBid and for the EU capital markets - the adoption by the European Parliament of the EU Listing Act.

There has been lots of criticism of Capital Markets Union and the slow pace of reform but the Listing Act has shown the EU at its best: grasping early the nature of the problem and the need to act; engaging with industry stakeholders to understand the options for reform; and then achieving consensus both within and between the Council and the EP. 

PrimaryBid has been active from the beginning, engaging since 2020 in both the policy debates that have now re-shaped the EU regulatory framework and in building a business that proves on a daily basis the great potential of retail demand for EU IPOs.

The Listing Act has the potential to usher in a transformation of the EU public markets and the access that individual European retail investors will benefit from by:

• removing prospectus requirements for offers of securities that are fungible with securities already listed. For listed companies, this has the effect of “uncapping” offers which include retail investors, removing the €8m limit on capital raising activity.
• harmonising the deal documents for such offers across the EU, which should make cross-border transactions simpler to execute. 
• reducing the mandatory number of days that an IPO has to remain open when opened to the public, something that previously had the effect of discouraging retail investor inclusion in initial public offerings.
• raising the EUR threshold at which an issuer is obliged to produce a prospectus

‍

PrimaryBid has already demonstrated the scale of retail investor appetite for EU listings, building, from the ground up, a successful platform that has now completed 32 transactions in just 3 years and raised 30 million euros for European companies. A large number of these have been SME businesses, a segment of the market where the Listing Act specifically aims to improve market-based financing conditions.

But the Listing Act will enable us to do so much more; it will prove a powerful driver for the future growth of more inclusive and more integrated EU capital markets.

With this key Parliamentary endorsement the way is now clear for the last few procedural formalities to be completed in the coming weeks, before the new rules enter into force and EU public markets can start to welcome retail investors.

This Commission and Parliament are now at the end of their terms and so it will be the next generation of Commissioners and MEPs that will be called on to maintain the momentum. The recent Letta Report (and the complementary diagnosis that Mario Draghi will no doubt put forward in June) sets out some bold ideas for building a new Savings and Investment Union and for further encouraging European companies to scale-up and list within the EU.  But high-quality analysis only gets us to the foothills; it’s the political leadership that will get us to the peaks.

The EU has shown the way forward and we hope that the UK authorities will not be too far behind. Reforms to the UK listings rules are close to completion but we still need the FCA to deliver a new prospectus regime.

‍

Investing in securities involves risk.