The Russian business community, represented by the association "Business Russia," has sent an official appeal to the Bank of Russia demanding a softening of the recently tightened rules for companies entering the stock market. The key point of contention is the mandatory signature of a financial advisor in the securities prospectus, which now becomes a mandatory condition for conducting an initial public offering (IPO).
In my assessment, the regulator, in its pursuit of investor protection, has created an administrative barrier that could virtually paralyze IPOs in the small and mid-cap segment. This concerns companies planning to raise between 1 and 2 billion rubles. For them, finding an organizer willing to assume joint liability for the content of the prospectus is an almost impossible task.
The Essence of the Conflict
In early August, the Central Bank tightened the rules for admitting securities to organized trading. Now issuers are required to engage at least two independent analysts to assess the fair value of the business, and after the placement, to obtain ratings from at least two credit agencies. However, the most painful point became the requirement for a financial advisor's signature in the prospectus, which automatically makes the advisor jointly liable for the accuracy of all information.
The Chairman of the "Business Russia" subcommittee on public capital markets, Alexey Lazutin, rightly notes that placement organizers have no economic incentive to assume such responsibility. In practice, they will refuse the role of co-signatory, making a stock exchange listing simply impossible for small issuers. The business community proposes making the advisor's signature voluntary, leaving responsibility for the prospectus content with the issuer itself and its officials, as provided for by current legislation.
Global Context
It is noteworthy that while the Russian market is seeking ways to simplify access for small companies, the opposite processes are unfolding in the West. Meanwhile, the Moscow Exchange announced plans to attract video game developers to the stock market — there are more than 150 such studios in the country, and it is ready to create a separate council for them in the innovation sector.
On the American market, technology giants are preparing for listings: Anthropic has already filed a confidential IPO application with a valuation of about $1 trillion, and SpaceX has lowered the minimum entry threshold for retail investors from $500,000 to $2,000. However, experts see this not as concern for individual investors, but as a search for an "exit" for large shareholders at the peak of valuation.
My conclusion: the Russian regulator risks remaining in isolation if it does not find a balance between investor protection and the accessibility of the capital market. Requirements that make IPOs impossible for mid-sized businesses undermine the main goal — expanding the circle of public companies. Simplifying the procedure for small issuers is now critically important for revitalizing the entire stock market.