IPOs, not IPOops

A record number of companies listed on the Oslo Stock Exchange in 2020 and 2021. Getting a listing has never been quicker, while the introduction of the Market Abuse Regulation has not made it any easier to be a listed company.

- We have just been through a very special period. The Oslo Stock Exchange has been one of the top European exchanges in terms of IPOs, involving a plethora of technology, renewable energy and health companies, says Pernille Woxen Burum, BAHR Specialist Partner.

She returned to BAHR in 2021 after five years as an Oslo Stock Exchange lawyer, where she primarily worked in the market surveillance department. The duties of the Oslo Stock Exchange market surveillance department include prime responsibility for the ongoing obligations of listed companies (including MAR) and this was a key focus for Woxen Burum, who was involved in regulatory follow-up, ongoing guidance to issuers and sanctioning of violations. - We now have a number of new issuers with varying expertise and understanding of the regulatory and administrative followup implications of a listing. In a frantic listing year, it has been imperative for us to explain to aspiring and new issuers what responsibilities and duties are entailed by the listed company status. It is important to us that those we help with a listing are in fact also ready for it, says Lars Knem Christie, BAHR partner. The Oslo Stock Exchange has in parallel with record IPO activity implemented Euronext systems and regulations, including the implementation of the Market Abuse Regulation (MAR) in the stock exchange regulations.

- This has definitely added new layers of complexity. Requirements are stricter and expectations are higher, while companies and their management have limited time to prepare, since the majority of listing processes have been on Euronext Growth and not on the main list, says Christie, before adding:

- The MAR implementation, as well as the volume of companies and transactions on Euronext Growth, has most definitely added to both expectations and requirements. It has been an extraordinarily exciting time for us as advisors prices. It is therefore of decisive importance to strike the right balance between what you can say about the future at the time of the IPO and what you are actually able to deliver on, says Christie.

Many potential pitfalls

It has also been exciting for the companies that have completed an IPO in the last year. Capital markets have at times been characterised by considerable volatility, and companies have had to contend with major uncertainty in their own product or service markets, with the pandemic as a backdrop. This situation had made it difficult to deliver on, as well as to communicate, expectations and forecasts.

- Many of the newly listed companies are growth companies, with a limited historical financial data record. This ramps up the pressure when it comes to forward-looking statements. Providing guidance can be challenging, and it carries certain consequences. We know from experience that having to row back on previously communicated expectations may have a significant negative impact on - Going from being an unlisted to a listed company is a major change, also in terms of information management. There will typically be a steep learning curve on what information you as an issuer may comment on or and disclose – both externally and internally. Becoming a publicly traded company will in many cases mean having to limit internal sharing of certain types of information and modifying processes accordingly. Externally, comments made to the market may affect the company’s share price, and must thus be in conformity with other information disclosed by the company, says Woxen Burum. MAR is also clearer in this regard than previous regulations. MAR makes it clear that statements made in investor meetings, presentations and webcasts also form part of the picture. You cannot get away with making market updates by mumbling them in passing.

Lars Knem Christie

- You need to carefully consider what you say – and not say. This applies not only to written disclosures in stock exchange notifications, but also to Q&A sessions, to statements made to journalists and analysts – and, significantly, to social media posts. Practice makes perfect, says Christie.

- The concept is that you must continually determine whether you are in possession of information that is subject to a duty of disclosure. If you have little experience of this, you may be surprised to learn your

responsibilities in this regard. But being overly cautious is not the right approach either. Companies need to specifically decide when they believe that a set of facts amount to insider information, and cannot simply hedge their bets by taking a one-size-fits-all approach. The Oslo Stock Exchange makes clear demands on company management in this regard, says Woxen Burum.

The compressed listing processes mean that there is often less time for training on issues like this.

- This makes it all the more important to get a proper handle on this once listing is in place. Setting up robust systems and procedures for managing insider information, and developing internal knowhow. BAHR is committed to serving as an advisor before, during and after an IPO, concludes Christie.

In a frantic listing year, it has been imperative for us to explain to aspiring and new issuers what responsibilities and duties are entailed by the listed company status

Pernille Woxen Burum