Translation. Region: Russian Federal
Source: Central Bank of Russia –
An important disclaimer is at the bottom of this article.
Bank of Russia defined prospects for regulating the IPO market after publicly discussing their initiatives. The proposed measures will contribute to the formation of best practices and improving the quality of IPOs.
The first part of the changes is aimed at adapting the information disclosed by issuers to the needs of investors. The summary of the securities prospectus will be transformed into a short and clear document, which reflects financial indicators in comparison with previous periods, a description of the company's development strategy, information on dividend policy and other key information. And the securities prospectus itself will need to include forecast indicators for the coming year.
Companies are also required to disclose information on the planned and actual distribution of shares among buyers, the existence of restrictions on the sale of securities by the issuer and current shareholders, as well as the mechanisms used to stabilize the price of shares to reduce their volatility after the IPO.
The regulator plans to establish a new listing condition. When entering an IPO, the issuer must submit at least two independent analytical reports with an assessment of the fair value of the company. They can be prepared by professional participants or audit organizations in the financial market. In their reports, they must reflect all the essential information about the company: the current position on the market and the results of activities, prospects and forecasts for development, possible risks. At the same time, they must justify the methodology of their assessment. As a result, retail investors will have access to high-quality analytics for making informed decisions.
For third-tier companies, additional guarantees of the reliability of information and the quality of the preparation of issue documentation will be attracted organizations providing services for the preparation of a securities prospectus and (or) the organization of placement. All changes are planned to be prepared by the end of 2025.
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