The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, today published a report on how the flexibilities for listed issuers, introduced as a result of the pandemic, could be used to stimulate SME listing in the future.
Drawing upon the initial findings of a WFE member survey on covid-related issuer flexibilities, today’s paper studies how exchanges worked closely with wider stakeholders — including regulators, governmental departments, and institutional investors — to help companies deal with the challenges of the pandemic. The paper acts as a stock take of the measures that were introduced but also considers whether some of these relaxations are fit for purpose as we ‘build back better’ following the pandemic. In particular, the paper notes:
Capital raising measures, including relaxed pre-emption rights for shareholders, enabled companies to raise emergency funding and remain fully solvent.
Authorities granted temporary extensions for filing of annual disclosures;
Virtual and hybrid Annual General Meetings enabled shareholders to effectively engage with company management, without having to be present in person;
Online investor roadshows enabled savings in terms of management time and costs, compared with traditional roadshows;
Alternative audit procedures were employed by the international audit community, to provide a ‘reasonable level of assurance’ over corporate reporting;
A number of WFE members produced guidance for issuers and investors to promote awareness of ways to deal with the novel challenges of the pandemic; and
Effectively implementing these relaxations required close working with key stakeholders.
Nandini Sukumar, Chief Executive Officer, the WFE said: “As we continue to recover from the pandemic, it is critical that we understand and learn from the role that the exchange community has played in guiding issuers through the challenges they experienced. While markets varied in their individual responses, this paper is a welcome contribution in highlighting measures that were successfully implemented and more importantly, those that can be used to encourage SME listing”.