SEC approves Nasdaq rule change to permit direct listings without an IPO

2019 ◽  
Vol 20 (3) ◽  
pp. 25-27
Author(s):  
Helene R. Banks ◽  
Bradley J. Bondi ◽  
Charles A. Gilman ◽  
Elai Katz ◽  
Geoffrey E. Liebmann ◽  
...  
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Securities And Exchange Commission ◽  
Securities Litigation ◽  
Content Type ◽  
Rule Change ◽  
Rule Changes ◽  
Expert Analysis ◽  
Public Offering

Purpose To explain the rule changes in Nasdaq’s new Listing Rule IM-5315-1, approved by the US Securities and Exchange Commission (SEC) on February 15, 2019, that permit direct listings on Nasdaq without an initial public offering, similar to the New York Stock Exchange (NYSE) rule changes approved in 2018. Design/methodology/approach Explains the legislative and regulatory background, historic limitations on direct Nasdaq listings, and de-tailed provisions of Nasdaq’s new Listing Rule IM-5315-1. Findings The direct listing alternative to an IPO may appeal to cash-rich companies that do not need the publicity or new capital associated with a traditional IPO. Originality/value Expert analysis from experienced securities litigation and corporate governance lawyers.

Beijing's Alibaba move signals shift on IPR

2015 ◽  
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Share Price ◽  
Online Retail ◽  
Content Type ◽  
Counterfeit Goods ◽  
York Stock Exchange ◽  
The Government ◽  
Public Offering

Subject Alibaba's involvement in trade in counterfeit goods, and the authorities' response. Significance At nearly 300 billion dollars in annual sales, China has the largest online retail market in the world. Some 80% of it is handled by the Alibaba Group. In September 2014, Alibaba launched on the New York Stock Exchange (NYSE), raising 25 billion dollars in what became the world's largest ever initial public offering (IPO). Four months later, Chinese regulators went public with allegations implicating Alibaba in the sale of vast quantities of counterfeit goods, sending its share price falling and bringing one of China's most prominent private firms into public confrontation with the government. Impacts The government and Alibaba will seek a mutually face-saving exit from their confrontation. The government will want to avoid critically undermining Alibaba, whose operations provide jobs for millions of people. The transition to a consumption- and innovation-led economy will require ever-greater protection of IPR. Retailers and wholesalers will need to review their business to minimise possible involvement with counterfeit or sub-standard products.

Didi debacle shines light on China's new normal

2021 ◽  
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
The United States ◽  
New York Stock Exchange ◽  
New Normal ◽  
Content Type ◽  
York Stock Exchange ◽  
Regulatory Scrutiny ◽  
Public Offering

Significance China’s ride-hailing major Didi was targeted by the Cyberspace Administration of China (CAC) ahead of its initial public offering (IPO) on June 30. It is complying with the ongoing cybersecurity review mandated by Beijing and is battling rumours about plans to delist from the New York Stock Exchange and go private. Impacts Current investors in Chinese tech stocks need to consider this situation as a new normal, not a departure from trend. The VIE structure will likely come under greater regulatory scrutiny, but is unlikely to be dissolved. Didi may yet delist in the United States.

The conflicting roles of the new New York Stock Exchange

2006 ◽  
Vol 7 (3) ◽  
pp. 51-66
Author(s):  
George R. Kramer ◽  
Alan E. Sorcher
Keyword(s):  
New York ◽  
Stock Exchange ◽  
Governance Structure ◽  
Securities And Exchange Commission ◽  
Regulatory Function ◽  
New York Stock Exchange ◽  
Content Type ◽  
For Profit ◽  
York Stock Exchange ◽  
Public Offering

PurposeTo examine whether the New York Stock Exchange (NYSE) in its recent rule changes has provided the appropriate separation between its supervisory authority and the management of the Exchange.Design/methodology/approachDescribes the regulatory and governance structure proposed by the NYSE in connection with its public offering; discusses policy objections the security industry has made to the proposal, reviews responses by the NYSE and the Securities and Exchange Commission (SEC) to those objections; and discusses what steps might be on the horizon to better rationalize the regulatory and business side of the new for‐profit NYSE.FindingsThe NYSE's proposal should provide for regulatory consolidation with the NASD. The proposal heightens the conflict between a for‐profit exchange and its regulatory function. The proposal governance structure ignores the fact that NYSE LLC is the Exchange and has plenary authority over NYSE regulation. The proposal does not provide fair representation for members. The proposal does not provide appropriate treatment of market data.Originality/valueProvides a comprehensive view of recent changes to the NYSE's regulatory and governance structure and issues raised by the securities industry in response to those changes.

Alibaba Group Initial Public Offering: A Case Study of Financial Reporting Issues

2016 ◽  
Vol 31 (4) ◽  
pp. 449-460 ◽  
Author(s):  
Qing L. Burke ◽  
Tim V. Eaton
Keyword(s):  
New York ◽  
Initial Public Offering ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Financial Accounting ◽  
Learning Needs ◽  
York Stock Exchange ◽  
Accounting Courses ◽  
Chinese Company ◽  
Public Offering

ABSTRACT In September 2014, the Chinese e-commerce giant Alibaba Group Holding Limited issued shares on the New York Stock Exchange, making it the world's largest initial public offering. This case examines different aspects of the Alibaba Group's initial public offering, including Alibaba Group's business model, financial reporting and corporate governance, as well as the macroeconomic, political, and legal environment in which the company operates. In addition, this case will familiarize students with the risks and opportunities for Chinese companies and investors when a Chinese company lists in the U.S. This case is suitable for financial accounting and international accounting courses at the intermediate and advanced levels for undergraduates as well as graduate students. The case is scalable, and instructors can choose from multiple sections of the case and different case questions to tailor the case difficulty to their students' learning needs.

COVID-19 considerations for SEC cybersecurity guidance, disclosure, enforcement, and parallel proceedings: navigating the new normal

2020 ◽  
Vol 21 (2/3) ◽  
pp. 111-126
Author(s):  
Aldo M. Leiva ◽  
Michel E. Clark
Keyword(s):  
Securities And Exchange Commission ◽  
Effective Vaccine ◽  
Resource Reallocation ◽  
Securities Litigation ◽  
Public Companies ◽  
Content Type ◽  
Business Operations ◽  
Expert Analysis ◽  
Securities Industry ◽  
Remote Operations

Purpose To examine the COVID-19 pandemic’s effects on regulated entities within the context of cybersecurity, US Securities and Exchange Commission (SEC) compliance, and parallel proceedings. Design/methodology/approach Describes the SEC’s ability to conduct its operations within the telework environment, its commitment and ability to monitor the securities market, its enhanced monitoring of the adverse effects of SEC-regulated companies from COVID-19, its guidance to public companies of disclosure obligations related to cybersecurity risks and incidents, the SEC Office of Compliance and Examinations’s (OCIE’s) focus on broker-dealers’ and investment advisories’ cybersecurity preparedness, the role and activities of the SEC Division of Enforcement’s Cyber Unit, and parallel proceedings on cyberbreaches and incidents by different agencies, branches of government or private litigants. Findings SEC-regulated entities face many challenges in trying to maintain their ongoing business operations and infrastructure due to severe financial pressures, the threat of infection to employees and customers, and cybersecurity risks posed by remote operations from hackers and fraudsters. The SEC has reemphasized that its long-standing focus on cybersecurity and resiliency within the securities industry will continue, including ongoing vigilance over companies’ efforts to identify, assess, and address the inherent, heightened cybersecurity risks of teleworking and the resource reallocation that business need to sustain their operations until a safe and effective vaccine is developed for COVID-19. Originality/value Expert analysis and guidance from experienced lawyers with expertise in securities, litigation, government enforcement, information technology, data protection, privacy and cybersecurity.

Revisiting the viability to allow dual-class share structure companies to list in the financial market of Hong Kong

2018 ◽  
Vol 47 (3) ◽  
pp. 167-195 ◽  
Author(s):  
John Kong Shan Ho
Keyword(s):  
New York ◽  
Hong Kong ◽  
Initial Public Offering ◽  
Financial Market ◽  
Stock Exchange ◽  
The One ◽  
Public Offering ◽  
The Right ◽  
Dual Class ◽  
Share Structure

The request of Alibaba, China’s largest e-commerce company, to allow a self-selected group of its past and present management known as the ‘partners’ the right to nominate a majority of the directors in its negotiation with the Hong Kong Stock Exchange (HKEx) for an initial public offering (IPO) in 2013 reignited a new round of debate over the one share, one vote policy, which has survived for three decades in Hong Kong. Alibaba’s IPO application to list on the HKEx was eventually rejected which ultimately led to the company’s decision to list on the New York Stock Exchange. In late 2017, the debate on whether companies with dual-class share (DCS) structure should be allowed to list in Hong Kong re-emerged as the HKEx has announced that it would amend its listing rules to enable companies with DCS structure to list on its exchange, subject to certain safeguards and restrictions. This article examines what measures Hong Kong could adopt to allow companies with DCS structure to list on its exchange despite legal and institutional shortcomings of its financial market. In doing so, it will also make reference to other major financial markets in the world and examine how other jurisdictions have handled the issue of DCS structure companies.

IPO underpricing and long-term performance in China: the perspective of price limit policy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuxin Wang ◽  
Guanying Wang
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Ipo Underpricing ◽  
Content Type ◽  
Price Limit ◽  
Good Policy ◽  
Public Offering ◽  
Long Term Performance ◽  
Term Performance

PurposeThe purpose of this paper is to explore how the price limit policy implemented in 2014 affects initial public offering (IPO) underpricing and long-term performance in China.Design/methodology/approachThe data are the IPOs from Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) between 2004 and 2018. The data are firstly divided into the IPOs before the price limit policy and the IPOs after the price limit policy according to the time of issuance. Then the two groups are divided into 4 subsamples according to the market blocks and the P/E ratio. The authors use multiple regression models to explore the effect of price limit policy in each subsample.FindingsThe first-day price limit system for IPOs is similar to the upward fuse mechanism, the purpose of which is to suppress IPO underpricing. However, this study finds that the policy does not suppress IPO underpricing, but increases the underpricing rate in all subsamples. Besides, the long-term performance in each subsample is different from each other. Main Board stocks’ long-term performance is worse after the policy. The policy makes Small and Medium Enterprise Board (SME Board) and Growth Enterprise Market Board (GEM Board) stocks with high P/E ratios perform better in the long term. For SME Board and GEM Board stocks with low P/E ratios, the policy makes no significant effect.Practical implicationsGood policy intentions may sometimes lead to counterproductive effects. However, since the long-term performance of each subsample is different, it is difficult to judge whether the policy should continue to be implemented or cancelled. Implementing different policies for different subsamples may be a better way to solve this problem.Originality/valueThis paper contributes to the study of IPO underpricing and long-term performance from the perspective of price limit policy.

Top management team characteristics and firm growth

2015 ◽  
Vol 21 (1) ◽  
pp. 107-127 ◽  
Author(s):  
Alessandra Colombelli
Keyword(s):  
Initial Public Offering ◽  
Firm Growth ◽  
Stock Exchange ◽  
Method Of Moment ◽  
Firm Characteristics ◽  
London Stock Exchange ◽  
Content Type ◽  
Factors Affecting ◽  
Public Offering ◽  
Generalized Method Of Moment

Purpose – The purpose of this paper is to identify the factors affecting the growth of companies listed on the Alternative Investment Market (AIM), the London Stock Exchange market for young and growing companies. Design/methodology/approach – The author investigates post-initial public offering (IPO) growth for a panel of 665 companies listed on the AIM between 1995 and 2006. The empirical model uses the generalized method of moment-System (GMM-SYS) estimator. Findings – The findings confirm that small companies listed on the AIM grow more quickly after the IPO. It seems that both human capital and firm characteristics are important determinants of their rapid growth. Practical implications – The results of this study have some implications for policy. Policy makers should take account of the relevance of an efficient financial system. It is important also to consider the process of transformation of the cultural and behavioural attitudes of various countries towards entrepreneurship. Originality/value – This paper analyses the determinants of firm growth in a particular entrepreneurial setting, that is, IPO on the AIM, the sub-market of the London Stock Exchange.

Determinants of heterogeneity in investors' opinions on IPO valuation: evidence from the Pakistan stock market

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Mehmood ◽  
Rasidah Mohd-Rashid ◽  
Norliza Che-Yahya ◽  
Chui Zi Ong
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Least Square Method ◽  
Political Stability ◽  
Least Square ◽  
Content Type ◽  
Pricing Mechanism ◽  
Price Range ◽  
Public Offering ◽  
High Level

PurposeThis study investigated the effect of pricing mechanism and oversubscription on the heterogeneity of investors' opinions on initial public offering (IPO) valuation.Design/methodology/approachBesides the ordinary least square method, this study incorporated robust least square, stepwise least square and quantile regression methods to investigate the aftermarket behaviour of investors using the price range on the first day of trading of 82 IPOs listed on the Pakistan stock exchange.FindingsThe aftermarket behaviour of investors was found to be significantly influenced by the pricing mechanism, oversubscription, financial leverage, political stability and the risk of IPO, whereas control of corruption showed an insignificant impact. Concurrently, the findings showed that pricing mechanism and oversubscription played a crucial role in determining the intensity of investors' heterogeneous opinions at high levels of significance.Originality/valuePricing mechanism and oversubscription not only signal the quality of IPOs but also provide an important means for reducing the information asymmetry associated with new listings. Based on the literature review, it was found that both the pricing mechanism and oversubscription have yet to be explored in investigating the aftermarket behaviour of investors using the price range in the Pakistan IPO market. This study suggests that book building pricing mechanism and oversubscription are associated with lower heterogeneity in investors’ opinions at a high level of significance.

Shariah-compliance and IPO underpricing: evidence from Pakistan Stock Exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Mehmood ◽  
Rasidah Mohd-Rashid ◽  
Ahmad Hakimi Tajuddin ◽  
Hassan Mujtaba Nawaz Saleem
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Ipo Underpricing ◽  
Content Type ◽  
Initial Return ◽  
Asset Volatility ◽  
Financial Characteristics ◽  
Public Offering ◽  
The Impact

Purpose This study aims to investigate the effect of Shariah-compliant status and Shariah regulation on initial public offering (IPO) underpricing in Pakistan. Design/methodology/approach Besides the ordinary least square’s method, this study used quantile least squares as a robust approach and stepwise regression for further analysis to investigate the underpricing phenomenon in Pakistan. Data of 84 IPOs listed on Pakistan Stock Exchange from January 2000 to December 2018 were collected to determine the impact of Shariah-compliant status and Shariah regulation on IPO underpricing. Findings Results of the study show that Shariah-compliant status has a negative relationship but Shariah regulation has a positive relationship with IPO underpricing. Hence, it is contended that Shariah-compliant firms have lower asset volatility and uncertainty than non-Shariah-compliant firms because of less information asymmetry, resulting in lower underpricing. These Shariah-compliant firms provide signals of high-quality IPOs as they must comply with the strict guidelines issued by the Securities Exchange Commission of Pakistan in addition to being considered as amicable by investors. Further, this study suggests that investors are more attracted to Shariah-compliant firms than non-Shariah-compliant ones. Research limitations/implications This study’s offers limited consideration of nonfinancial and financial characteristics that could influence the decision of investors to subscribe to IPOs. Besides, future studies could consider the screening benchmarks; for instance, debt and cash may explain the intensity of IPO initial return in Pakistan. Originality/value The present work empirically investigated the influence of Shariah-compliant status and Shariah regulation on IPO underpricing in Pakistan’s IPO market, which has been scarcely covered in the existing literature.

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