European equity groups unite to boost IPO market

LONDON, March 17 Mon Mar 17, 2014 8:00am EDT

LONDON, March 17 (Reuters) - Three European equity associations are uniting to find ways of boosting initial public offerings (IPOs) in the region, encouraging companies held back by subdued credit markets to raise funds by other means.

They are setting up a task force that will present its findings, which will also tackle debt financing, to the EU executive this autumn.

The Director General of one of the groups, Judith Hart, said the blueprint would include recommendations to allow some companies to operate below international financial reporting standards, and to tailor listing regulations to individual countries and exchanges.

"In IPO markets, timing is of the essence," said Hart, of the Federation of European Securities Exchanges (FESE).

"Right now, it's a good moment, but in relative terms, when you look over 10 years and even 20 years...there has been a historic decline."

As European banks have reined in lending, new stock market listings have surged, recovering last year and growing further so far in 2014 - though they still stand way below the boom years of the 2000s.

FESE, EuropeanIssuers, and the European Private Equity and Venture Capital Association (EVCA) said on Monday that the task force would comprise a mix of around 20 lawyers, corporate brokers and exchange representatives.

They include Deirdre Somers, Chief Executive of the Irish Stock Exchange, and management consultant firm Oliver Wyman.

European IPO activity has tripled to $12 billion so far this year against the same period of 2013, Thomson Reuters data showed last week.

London IPOs have reached the highest levels seen since 2007, with 14 issues in the first quarter of this year. But the corresponding figure seven years ago was 43.

The European recommendations will follow a similar initiative in the United States that led to the Jumpstart Our Business Startups Act (JOBS) in 2012.

That legislation eased financial reporting obligations for small companies and allowed them to test out investor interest before committing to an IPO.

The European research team will present its findings to the European Commission in November, following European parliament elections in June.

The EU is conducting its own research into corporate finance, with the Commission due to present a "Communication on the Long-term Financing of the European Economy" this month. (Reporting by Freya Berry; Editing by John Stonestreet)