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Life as a listed company

Your company is listed. And now, what’s next?

See what benefits, opportunities and obligations you have as a listed company.

Taking advantage of your new status

Once your company is publicly traded the benefits are numerous, including:

  • visibility;
  • reputation;
  • objective valuation; and
  • ability to attract clients, suppliers and employees.

You may review the benefits and considerations of being publicly listed.

Continuing Obligations

However, there are a number of continuing obligations that will apply to your company in order to maintain your listing. Such obligations include the following:

a. Financial reporting

Your company must comply with certain requirements in terms of transparency and financial communications. This means that your company:

  • will have to produce and publish annual and interim financial statements; and
  • may be required to produce quarterly trading updates (for companies admitted to certain Regulated Markets).

b. Information disclosure

Transparency and providing information to the market are an essential part of being a public company. Therefore you should be ready to disclose information to the general public on a regular basis and without delay in relation to any developments that could have an impact on your company’s share price. Such information may include:

  • your business activities, including products, competition, markets, and possible risks;
  • your corporate ownership including changes in shareholdings of a certain size;
  • your company’s financial situation, etc.;
  • changes to your board, including the professional background of your board members; and
  • the remuneration of your board members and senior employees, including the grant of stock options.

For Multilateral Trading Facilities there are generally lighter disclosure requirements. Rules may vary in different countries and markets.

c. Corporate governance

Your shareholders will expect you to behave according to the codes and guidelines on corporate governance that apply in the Member State in which you are listed. Such codes do not have the force of law but are issued by regulatory institutions in the relevant Member State.

Some fundamental principles generally applicable in all EU Member States are:

  • The board should have:
    • a majority of directors who are independent from the company;
    • two different persons acting as Chairman and Chief Executive.
  • A listed company should have an Audit Committee to supervise the annual audit:
    • chaired by an independent director;
    • with experts in relevant financial and legal matters;
  • A listed company should have a Remuneration Committee made up of independent non-executive directors. Its role is:
    • to set the remuneration of board members and senior employees; and
    • to produce an annual remuneration report that will be published to shareholders.


Other rules:

Directors and senior employees must not deal in the company’s shares or exercise stock options at any time when they are aware of information about the business that could affect the company’s share price and has not been notified to the market.

If your company has a shareholder with a majority or substantial minority holding, arrangements should be put in place to ensure that the business can be run without undue influence from that shareholder.

d. Monitoring changes in shareholdings

As a listed company you will be obliged to publish:

  • details of any issues of shares;
  • any changes in the holdings of any shareholders above certain thresholds;
  • any dealings in shares by directors; and
  • a list of any persons who may have access to information that might affect the company’s share price (if you are listed on a Regulated Market).

e. Dividends

It is very common for listed companies to publish a dividend policy in their Prospectus/Admission Document, setting out the basis on which the board will decide on whether and how much will be distributed annually to shareholders by way of dividend.

The regular payment of dividends can be very important to maintain and improve a listed company’s share price. However, there are EU-wide restrictions on the funds out of which dividends can be paid.

It is usual for the payment of dividends to be approved by shareholders at the Annual General Meeting.

f. Ongoing costs

After your Initial Public Offering (IPO), ongoing costs as a listed company will include:

  • annual fees for your Corporate Finance Adviser;
  • retainer fees and commissions for your Corporate Broker;
  • higher annual audit fees due to IFRS compliance;
  • financial Public Relations and Investor Relations communications;
  • preparing and publishing your annual report;
  • management time spent on investor presentations, communications and regulatory compliance; and
  • additional staff needed to assist with compliance issues.

g. Investor & Media Relations

As a listed company, your relations with current and potential investors, as well as with the media can have an impact on your share price. It is important to be able to communicate both good and bad news to the market in compliance with the ongoing disclosure obligations outlined above. However, there are also EU-wide legal restrictions on what can be communicated and who may receive the information.

As well as appointing lawyers and financial PR advisers who are familiar with the regulations and pitfalls, you should develop a communication kit including:

  • press releases;
  • website updates;
  • annual and interim reports;
  • circulars and other publications to shareholders;
  • analysts’ reports; and
  • investor and media events.

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