In a challenge to the London Stock Exchange’s success in drawing big initial public offerings, rival NYSE Euronext has launched a “fast path” campaign to persuade Chinese, Indian and Russian companies planning initial public offerings in the US to list partially in Europe as well.
“We’re giving people an alternative to London,” said Catherine Kinney, head of global listings for NYSE Euronext. “London has enjoyed a – quote – monopoly and we intend to focus on things to our advantage.”
The stock and derivatives exchange’s plan takes advantage of new rules agreed in December by regulators in the Netherlands, France, Belgium and Portugal that allow companies for the first time to offer securities in those countries without the need to produce another prospectus.
Ms Kinney said that, under a new scheme, companies would only need one set of documents to list in both the US and Europe, now that Dutch and French regulators were willing to accept a prospectus approved by the Securities and Exchange Commission. “We are talking to bankers, lawyers and accountants and saying that if [their clients] would like to do a portion of their offering in Europe this way is possible,” the Paris-based executive said.
The move is the latest sign that the group, formed last year from the merger of the New York Stock Exchange with pan-European operator Euronext, is building a global listings business.
It also comes as financial watchdogs on both sides of the Atlantic are working on “mutual recognition” of each other’s standards to allow investors easier and cheaper cross-border access to markets.
The scheme is limited to a “technical listing” – an admission to an exchange for trading in the company’s stock, with no public fund raising taking place.
Ahead of the plan, Satyam, an Indian technology company, was first to take advantage of the new rules when it listed its American depository shares on Euronext Amsterdam in January.
Ms Kinney said for many foreign groups having such a dual listing would increase access to a broader range of investors.
Asked why the exchange planned such a push amid depressed global stock markets, She said: “Things are slow right now [for IPOs] globally but our time is being spent getting the regulatory framework sorted out. We are not very well known by the banking teams in Europe.”
This week in Brussels, the EU-US Coalition on Financial Regulation - which includes the British Bankers Association, the Futures and Options Association and Sifma, Wall Street’s main securities industry group - will unveil a report on how to bring about “a more open and coherently regulated transatlantic marketplace”.
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