20 Are there any other current developments or emerging trends that should be noted?
The CEO of Euronext Dublin, Daryl Byrne, reported that owing to the volatility in equities globally, it is not likely that there will be any IPOs in the first half of 2019, and this has proven to be the case to date. However, companies covering various sectors, including property, life sciences, hotel and leisure and technology, have been reported as considering embarking on an IPO in 2019.
Since 2013, there has been a consistently growing trend towards IPOs of Irish property REITs and property-related IPOs generally. In June 2018, Yew Grove REIT plc raised €75 million having listed on both the Euronext Dublin and AIM markets. This was the sixth property-related IPO to float on Euronext Dublin in five years. While this would seem to indicate a trend towards property-related IPOs in Ireland, it is possible that other sectors may become more visible. However, the challenges relating to the global equities environment and Brexit, to name two, remain.
As mentioned in question 3, Euronext acquired the Irish Stock Exchange plc on the 27 March 2018, which now operates under the business name Euronext Dublin. Euronext is the leading pan-European exchange in the eurozone, spanning Belgium, France, Ireland, the Netherlands, Portugal and the UK (with Euronext now holding 97.7 per cent of Norway’s Oslo Børs VPS and intending to proceed with a compulsory acquisition procedure in order to acquire 100 per cent). The Euronext network had around 1,300 listed issuers worth approximately €3.5 trillion in market capitalisation as of the end of March 2019. Following on from Euronext’s acquisition of the Irish Stock Exchange, the Enterprise Securities Market has been renamed Euronext Growth and the Main Securities Market has been renamed Euronext Dublin. In addition, the Euronext Dublin team has expanded from around 44 to 50 people.
As part of the Euronext federation, Euronext Dublin completed its migration to the Optiq trading platform on 4 February 2019. CEO of Euronext Dublin, Daryl Byrne, explained that it is a key step in providing investors with a pan-European order book and access to a deeper pool of capital. Under the federal system, Euronext Dublin has become the centre of listings of debt and funds and exchange-traded funds within the group. Furthermore, it is reported that Euronext Dublin is becoming more ‘euro- rather than UK-centric’ and offering companies access to euro capital, especially given the uncertainty of Brexit.
With the outcome of Brexit negotiations still unknown, it is still unclear how Irish capital markets will be affected (whether positively or negatively). As mentioned in question 2, Ireland is set to become the leading English-speaking listing venue within the EU. It is possible that the UK’s exit from the EU could spell increased activity on Euronext Dublin, from issuers seeking access to passporting within the EU and direct access to the EU market. However, the delays to Brexit appear to be having an impact, with various reports of companies being hesitant to proceed with planned IPOs in light of the uncertainties.
Balance for Better Business
A review group, Balance for Better Business, an independent business-led review group established by the Irish government, has recently concluded its first report. While not setting gender quotas, the report states that all Irish companies listed on the stock market should have at least 25 per cent female directors by the end of 2023. More specifically, it also sets a target that by the end of 2019, no company traded on the Euronext Dublin markets should have an all-male board. This is in line with the European Commission’s agenda on enhancing gender balance on corporate boards. Therefore, listed companies and those considering IPOs may have to review the composition of their board members going forward.
Conduct of Business Sourcebook Provisions
The FCA released a new COBSP in 2017, which apply where the analysts’ presentations occur on or after 1 July 2018. The new rules provide that unconnected analysts must be given the same access to an issuer’s management and information relating to the offering as connected analysts. While the rules are not directly applicable to Ireland and there are, as of yet, no equivalent provisions in Ireland, it has impacted the timetable of Euronext Dublin IPOs, as many issuers seek dual-listing primary listings in Ireland and London.
Changes to Prospectus Directive
Regulation (EU) 2017/1129 (New Prospectus Regulation) was published on 30 June 2017. It repeals Directive 2003/71/EC and takes effect in full from 21 July 2019. However, the following specific provisions have already come into effect:
- certain exemptions from the obligation to publish a prospectus, including where an issuer has securities admitted to trading on a regulated market and wishes to admit further securities up to a limit of 20 per cent over 12 months;
- the exemption from the scope of the Regulation for offers of securities to the public with a total consideration in the EU of less than €1,000,000 (calculated over a period of 12 months); and
- the option for member states to exempt offers of securities to the public from the obligation to publish a prospectus where the total consideration of each offer in the EU is less than €8,000,000 (calculated over a period of 12 months) and is not subject to notification under article 25.
Other than those mentioned above, the New Prospectus Regulation will implement numerous changes on 21 July 2019, including:
- changes to the content of prospectuses, making them more concise;
- the introduction of a growth prospectus for small and medium-sized enterprises, which will entail reduced disclosure requirements and may be helpful for Euronext Growth companies making offers of securities; and
- the introduction of a fast-track process under which a company that frequently accesses capital markets can use an annual universal registration document that is similar to a US shelf registration statement, to benefit from a five-day approval process with regulators (to include the CBI).
Overall, the New Prospectus Regulation attempts to simplify and streamline prospectus requirements. However, it remains to be seen how the requirements will operate in practice.
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