The Bank of Russia has presented its plans for regulating the initial public offering (IPO) market following a public discussion of its initiatives. The proposed measures aim to improve practices and enhance the quality of IPOs.
The first set of changes focuses on adapting the information disclosed by issuers to meet investors’ needs. A summary of a securities prospectus will be transformed into a concise document containing financial indicators compared with previous periods, a description of the company’s development strategy, details of its dividend policy, and other key information. Additionally, the securities prospectus will include forecast indicators for the coming year.
Companies are also required to disclose information on the planned and actual allocation of shares among buyers, existing restrictions on the sale of securities by the issuer and current shareholders, as well as mechanisms used to stabilize share prices to reduce their volatility after the IPO.
The regulator intends to introduce a new listing condition. When going public, an issuer should submit at least two independent analytical reports assessing the company’s fair value. These reports can be prepared by professional participants or audit firms operating in the financial market. They should contain all essential information about the company: its current market position, performance indicators, development prospects and forecasts, and potential risks. The authors must also substantiate their assessment methodology. This will allow retail investors access to high-quality analytics for making informed decisions.
To ensure additional assurance of information accuracy and quality in offering documents, issuers of microcap stocks can engage service providers specializing in prospectus preparation or arranging securities offerings. All changes are expected to be prepared by the end of 2025.
