EUIPOs

EUIPOs are initial public offerings conducted in the European Union or European Economic Area, through which a company offers its shares to the public and seeks admission to trading on an EU-regulated market. They are used by both established firms and growth companies to raise equity capital and gain liquidity.

Regulatory framework: The issuance is governed by the Prospectus Regulation, as amended by MiFID II and MAR. A prospectus must usually be prepared and approved by the home member state's national competent authority and then validated for cross-border offers. There are exemptions for certain small offers and private placements. Cross-border offers rely on the EU passporting framework between member states; after Brexit, UK listings follow separate rules.

Process: Companies engage investment banks to run due diligence, structure the offering, and prepare a prospectus. They conduct investor roadshows, set the offer price and size, and allocate shares. The listing occurs on a regulated market, often with a market maker or sponsor, and may include price stabilization activity after listing.

Ongoing obligations and costs: Once listed, issuers face ongoing disclosure and governance requirements, including periodic financial reporting and compliance with market abuse rules. Listing and continuing obligations incur costs such as underwriting fees, regulatory charges, and annual exchange fees.

Market dynamics: Demand for EUIPOs depends on market conditions, sector trends, and investor appetite for growth or value plays. The EU has several major exchanges and dedicated growth markets aimed at smaller issuers, while regulatory alignment across member states aims to facilitate cross-border offerings.