(News Bulletin 247) – The financial markets authority has announced several measures to relax the rules for companies wishing to enter the Paris Stock Exchange and thus revitalize the Parisian stock market which has been declining over the years.

The Financial Markets Authority (AMF) announced on Thursday a series of measures aimed at simplifying and modernizing the IPO process in France, in a context of a notable drop in the number of operations in recent years.

“In a context where, for several years, the French market, like other European markets, has experienced a significant drop in the number of IPOs (Initial public offering or IPO in English, Editor’s note), the AMF wanted to study the practices in force on other major markets, examine the opportunity to modify its doctrine relating to the calendar and documentation of IPOs and promote good practices”, explains the gendarme financial.

“A unique prospectus”

One of the key measures concerns the documentation of IPOs. Companies will be able to turn to a “single prospectus”, a document intended to present essential information about the company, in particular its financial situation, its results and its prospects, in order to enable an informed investment decision.

This approach, common abroad, contrasts with the French “tripartite prospectus”, which consists of a registration document presenting the company, an operation note detailing the offer and indicative prices, then a final note setting the final price.

If the tripartite prospectus remains the practice favored by the AMF, the authority specifies that, within the framework of a single document, “the stakeholders can, in accordance with practices in force abroad, request confirmation of the end of the examination of information relating to the company”.

Preserve the “attractiveness of the rating”

This “partial validation” makes the information made available to investors more reliable. Another major development: the rules governing the setting of share prices are relaxed.

Until now, companies had to communicate a price range of plus or minus 15% around a pivot price, no later than three days before the offer closes. This obligation has now been removed, the range being considered too broad and of little relevance to current practices. The company must nevertheless indicate the maximum price of the shares, when it is known.

These developments aim to preserve “the attractiveness of the rating”, a “major issue” for “the capital markets to fully play their role in the service of corporate financing”, commented Marie-Anne Barbat-Layani, president of the AMF in a press release.

The AMF specifies that it was inspired by the recommendations of a report published in July by Forum IPO, a working group created in 2022 under the aegis of Paris Europlace and which brings together bankers, financial advisors, lawyers, investors and representatives of public authorities.

(With AFP)