CdM || The National Securities Market Commission (CNMV) and BME have presented a new method of going public that will make the current system more flexible, facilitating companies' access to the market.
The new procedure, called BME Easy Access, will allow the direct admission of shares to regulated markets without the requirement of obtaining a minimum distribution, or free float, prior to admission. In this way, the process of going public would be separated from macroeconomic and liquidity circumstances in the markets, which would favour companies' planning and avoid the risk that external circumstances frustrate the public offering.
Spain will become the first country to allow this new method and thereby advance some measures outlined in the Listing Act approved by the European Union to revitalise public markets. This measure also responds to one of the recommendations in the OECD report to revitalise the Spanish capital markets, included among those related to promoting conditions for admission and trading on the stock exchange. It also aligns with the proposals from the White Paper on boosting the competitiveness of Spanish capital markets, prepared by BME.
The proposal for the new method has been presented to the financial sector at an event held at the Madrid Stock Exchange, attended by Carlos San Basilio, president of the CNMV, and Juan Flames, CEO of BME. It was explained that BME Easy Access will have the following characteristics:
- The sequence of going public is reversed, starting with the verification of the prospectus, followed by an admission without distribution.
- Companies wishing to adopt this method must have a valuation exceeding 500 million euros, although the CNMV could authorise access for companies with lower capitalisation.
- When the issuer deems it appropriate, and within a period of up to 18 months, they will carry out one or more placements (via blocks or IPOs) after choosing the timing with little advance notice instead of the several months currently required.
- Until the required free float is obtained, trading will be conducted exclusively among professional investors, through the block trading method. Once sufficient diffusion is achieved, the company's shares will begin trading in the general trading mode of the Spanish Stock Exchange Interconnection System, SIBE.
- If, after 18 months from the initial admission, a sufficient distribution is not achieved, the CNMV will proceed to analyse the situation and, depending on the circumstances, could extend this period or consider the free float requirement met with the distribution achieved by that date, according to current legislation. If, after a possible extension of the period, the company does not carry out the placement, the CNMV would proceed with the exclusion of the shares ex officio.
- BME Easy Access is a complementary option available to any company going public if, at the time of registering the prospectus, market conditions do not support the placement.
BME and the CNMV have worked on the development of this new method in direct contact with the involved parties, whose opinions and suggestions have been considered for the final design.
The implementation of this new method will require the CNMV's approval of the modification of the Circulars of the Stock Exchanges regarding Admission to Trading and the Circular of the Stock Exchange Society concerning the Operating Rules of the Stock Exchange Interconnection System.
