Summary

The report highlights some of the recent changes in global securities market practices, how the private capital markets have contributed to the decline in public offerings, as well as the various approaches undertaken by key policymakers, particularly those in the financial hub status, in addressing these changes. This latter section is to provide a closer examination of the trends and developments in financial hubs which can trigger fundamental changes in global markets.

This report is also aimed at providing recommendations to relevant policy makers and standard setters by drawing from the analysis under this scope of research. While companies have different reasons to source for public equity funding, it is imperative that any new equity market regulations and policies moving forward should take into consideration not only the large, more mature and established firms. “New economy”, high-growth companies, will play an increasingly critical role in the economy as they have the potential to challenge status quo and increase the entrepreneurial dynamism of an economy through a constant process of creative destruction. These companies however, have unique characteristics, and an increased appreciation of these characteristics and their motives for sourcing for equity capital, for example, as a source of “growth capital”, can also contribute positively to the ongoing policy discussions on how to support well-functioning public markets with a view to make capital markets better serve the real economy in the future.

As such, the report proposes four key approaches to address the changing paradigm – allowing private stock exchanges, listing of special purpose acquisition companies as well as direct listings and introducing weighted-voting rights for high-growth tech companies. Lastly while any new forms of alternative financing initiatives, be it platforms for trading of listed or unlisted securities, should be more responsive to the evolving needs and expectations of its participants, securities regulation too will have to be modernised to take into account a digitalised financial market that is constantly subjected to accelerating change.

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