The AMF is updating its doctrine and practice in order to modernise and make the IPO process in France more attractive

In accordance with its Impact 2027 strategic orientations, the AMF ensures that it regularly adapts the framework of its supervisory practices.

In 2015, the AMF took measures to make the preparation and execution of initial public offerings (IPOs) more flexible and secure^[1]. In 2024, the AMF amended its General Regulation to make the tranche reserved for retail investors in IPOs on the regulated market optional^[2]. By opening up the possibility for candidates for listing on the regulated market to float on the stock market through a private placement, the AMF has enabled IPOs to be carried out within a tight timeframe, facilitating their success^[3].

Against a backdrop where, for several years, the French market, like other European markets, has seen a significant decline in the number of IPOs, the AMF wanted to (i) study practices in other major markets, (ii) examine the advisability of amending its doctrine on IPO timing and documentation, and (iii) promote good practices.

With this in mind, the AMF asked the IPO Forum, set up under the aegis of Paris Europlace^[4], for its views and recommendations on the existing framework and desirable changes to the IPO process in France. Following a wide-ranging consultation, the working group set up by the IPO Forum has published a report entitled:  Working Group recommendations on possible changes to IPO practices in France (only in French).

The recommendations of the IPO Forum have been examined by the AMF Board, which has decided to change its doctrine and practice in order to modernise the current IPO process in France and make it more attractive, while at the same time highlighting certain good practices from the current system.

“Listing attractiveness is a major issue. It is crucial that the capital markets can play their full role in financing businesses. It is with this objective that the AMF has decided, in compliance with the European regulations and while taking into account investor needs, to move its practice forward. With this in mind, it has also drawn inspiration from the best practices observed abroad,” said Marie-Anne Barbat-Layani, Chair of the Autorité des Marchés Financiers.

1. What documents are needed to best present an IPO to investors?

1.1. The financial centre prefers a tripartite prospectus, without prejudice to the possibility of producing a single prospectus in accordance with European regulations

Under European regulations, issuers may prepare their IPO prospectus in the form of a single document or in the form of several separate documents^[5].

When the prospectus is produced in the form of a single document, it contains information about the company, such as its financial statements, a presentation of its activities and its specific risk factors, as well as information about the shares to be floated on the stock exchange (legal terms, associated risks, etc.) and a summary.

When the prospectus is produced in the form of several separate documents, it is comprised of three documents (referred to as a "tripartite" prospectus), which may be approved and published on different dates:

• a registration document containing information about the company (financial statements, activities, risk factors, etc.). The registration document is generally published first, prior to the launch of the operation;
• a securities note containing information about the shares to be floated on the stock exchange, which will be published at a later date;
• a summary published at the same time as the securities note.

In France, the practice of using the tripartite prospectus for IPO documentation and thereby making a registration document available prior to the launch of the operation, is widely favoured by the financial centre^[6]. However, it is possible to carry out an IPO on the basis of a single document, as the regulations allow, and as has already been done in France^[7].

While they do accept any other format authorised by European regulations, the AMF notes the preference expressed by market participants for the tripartite prospectus for IPOs. The AMF notes that this format meets the needs of issuers and investors, and makes it possible to ensure the reliability of information about the company made available to the market at an earlier stage.

1.2. Free choice of prospectus language

It is recalled that, pursuant to the AMF General Regulation, the prospectus may be drafted in French or English (with a translation of the summary into French in certain cases^[8]), at the issuer's discretion.

In addition, in its Position-Recommendation 2015-02, the AMF recommended that: "companies seeking to attract a wide-ranging public of French retail investors should give preference to a prospectus drafted entirely in French.” It also indicated that: "The use of English in an IPO prospectus should take account of the IPO characteristics and those of the company”^[9] and that: “A company under French law should also decide whether to draft an IPO prospectus in English in the light of its obligations to produce each year financial statements and a management report in French pursuant to the French Commercial Code.”

Subsequently, it was noted that the choice of English for the prospectuses of certain IPO projects led the issuers in question to drastically reduce their communications aimed at retail investors, in application of the aforementioned recommendation, in effect excluding any publicity about the project and disadvantaging the participation of retail investors.

The AMF points out that since there is a free choice of prospectus language, issuers may decide to reserve a tranche of the offering for retail investors and to conduct promotional campaigns, even if their prospectus is in English.

While issuers should consider whether the choice of language for their IPO prospectus is consistent with the type of investors they are targeting and their shareholding structure objectives, the AMF confirms that an IPO carried out on the basis of an English-language prospectus can give rise to a significant promotional campaign aimed at retail investors.

2. Specific provisions for retail investors

2.1. Reminder of the optional nature of the retail tranche in IPOs

It is recalled that the obligation for issuers who applied for their shares to be admitted to trading on the Euronext Paris regulated market when they were floated to include a tranche reserved for retail investors, provided for by Article 315-6 of the AMF General Regulation, was abolished in 2024.

Issuers may, if they so wish, still provide a retail tranche as part of their IPO. In this case, the AMF General Regulation stipulates that the lead manager shall endeavour to avoid an obvious imbalance, to the detriment of individual investors, between the allotment for such investors and the allotment for institutional investors^[10].

It is further recalled that, if an issuer decides to launch on the stock market through a private placement without a retail tranche, retail investors can still buy the securities on the secondary market, once the price has been set and trading has begun on the market, on the basis of the information provided in the prospectus.

In addition, the AMF notes that many issuers offer their employees the opportunity to subscribe to their company's shares at the time of their initial public offering, based on the provisions of the Labour Code on capital increases reserved for savings plan members. These initiatives are at the discretion of companies who wish to promote employee share ownership in parallel with the IPO process.

2.2. Reminder of the de facto revocability of retail orders in the open-price offer

The irrevocability of orders transmitted as part of the open-price offer may result from technical and legal operational constraints relating to the transmission of orders (orders received manually versus orders received online).

As part of its work, the 2014 working group on IPOs called on the high street banks, after studying the practical constraints, to examine the possibility of providing for retail orders to be cancelled at any time up to the close of the offer. As a result of this work, the major high street banks committed to offering the possibility for retail investors to cancel orders placed online in the near future. The AMF points out that, since then, the banks have indeed made such revocability possible.

In order to treat retail and professional investors equally, orders placed by retail investors online can now be revoked at any time until the offer is closed.

3. How can information about the IPO be made more reliable and disseminated?

3.1. Mechanism for communicating a listing project to the market: press release when the registration document is available (for a tripartite prospectus) or ITF press release (for a single prospectus)

By making a registration document available prior to the launch of the IPO, the issuer does not have to publish an intention to float (ITF) press release announcing its planned IPO.

The ITF, which is standard practice in other European countries and the US, contains certain important or essential information about the issuer and the proposed transaction. It does not include all the information that will appear in the prospectus, which will be published at the time of the offer. In France, where a tripartite prospectus is the usual practice, the press release informing the market that the registration document is available serves as the ITF press release.

The publication of the registration document (for tripartite prospectuses) or the publication of an ITF press release, as the case may be, comes before the dissemination of banking syndicate analysts' research reports and the start of the subsequent period of presentation and discussion with investors about the IPO candidate (the Pre-Deal Investor Education (PDIE) phase^[11]).

In cases where there are already listed securities linked to the issuer (for example, where the issuer is a subsidiary of a listed company or where the issuer has already issued listed bonds), the disclosure of confidential information that may constitute inside information about the issuer may only be made in compliance with the provisions of Regulation (EU) No. 596/2014 of 16 April 2014 on market abuse, and is, in particular, subject to the confidentiality of such information being maintained. It is recalled that if the dissemination of research notes by analysts would have the effect of violating this confidentiality, this inside information must be disclosed to the market.

Under the French tripartite prospectus practice, this disclosure could be made by means of a press release referring to the registration document of the issuer applying for an IPO.

Since the IPO documentation would be based on a single prospectus, this disclosure could then be made through the ITF press release issued before the dissemination of research reports are published.

When a company chooses to produce an IPO prospectus in the format of a single document, it is still possible for analysts from the syndicate banks to have access to the documentation before it is approved by the AMF at the time of the offer. The press release restoring equality of information could then correspond to the ITF press release published prior to the dissemination of the research reports.

In the absence of previously listed financial instruments, it is considered that in the event of a public offering, the restoration of equality of information must be effective at least at the time of publication of the prospectus or, in the absence of a public offering, prior to the start of trading in the securities.

3.2. Introduction of the possibility of confirmation from the AMF that the scrutiny procedure of the company information presented in the draft single prospectus has been completed, as an alternative to approval of the registration document

In foreign countries where the practice of a single prospectus prevails, the competent authority is liable to confirm to the issuer and its advisors, prior to its approval and before the banking syndicate analysts' research reports are distributed, that the scrutiny procedure of the draft prospectus has been completed, with the exception of the information relating to the terms of the offer, as this information is not yet available.

The sole purpose of this mechanism is to reassure stakeholders that the information on which the forthcoming research reports are based will not be modified or supplemented during the Authority's examination.

In France, in the context of a tripartite prospectus, the registration document is approved by the AMF and distributed to the public. Consequently, there is no need for stakeholders to ask the AMF for such confirmation that its examination is complete.

When a company chooses to produce an IPO prospectus in single document format, the AMF, keen to adapt to the needs of the financial centre, specifies that stakeholders may, in accordance with current practice in other countries, ask the AMF to confirm that it has completed its examination of those sections of the draft prospectus that correspond to the content of the registration document (i.e. information about the company^[12]), prior to the dissemination of the banking syndicate members' analyst research reports. The prospectus must then be completed and formally approved by the AMF.

When a single prospectus is chosen, this system, although less effective than the public dissemination of a registration document approved by the regulator, will make the information describing the issuer more reliable.

3.3. The issuer is free to set the duration of the PDIE phase

Investors, banks and financial advisors unanimously consider the PDIE phase to be beneficial. Investors are largely in favour of the prospectus being made available at an early stage, particularly through the tripartite prospectus, ideally several weeks before bookbuilding begins.

In this respect, the French system, which makes the registration document available upstream, would appear to be a good compromise between the system in force in other European countries which solely consists of publishing a single prospectus when the operation is launched, and the S-1 model in the US, which consists of posting the draft prospectus on the Securities & Exchange Commission website when it is filed with the authority for examination.

However, the majority of the members of the IPO Forum's working group and the people interviewed consider that setting the duration of the PDIE should remain the responsibility of the issuer, based on the recommendations of its advisors.

Noting that:

• On the one hand, the five-day period set by the AMF between approval of the registration document and approval of the prospectus has often proved ineffective, with investors asking for a PDIE period of at least one to two weeks to allow for an in-depth analysis of the issuer. On the other hand, according to some IPO project owners, it is also possible that this period may prove too lengthy in certain circumstances;
• The duration of the PDIE phase varies from operation to operation (issuer's sector of activity; presence of directly comparable issuers, etc.);
• The regulators of other major financial centres have not set a fixed duration;

The AMF leaves it up to the issuer, based on the recommendations of its advisors, to set the duration of the PDIE.

3.4. Amendment to the AMF Instruction on access by the analysts to information

The following developments amend AMF Instruction DOC-2020-05 Access by the financial analysts appointed within member institutions of the syndicate to information prior to publication of the prospectus:

Analysts from syndicate member banks participating in an IPO operation need upstream access to information about the company being floated.

Accordingly, Article 223-10-1 of the AMF General Regulation allows analysts to be informed upstream of operation launch, and in particular before the AMF approves any offer documentation, provided that the confidentiality of the information received by analysts is ensured in accordance with Article 315-15 of the General Regulation, with a view to shortening the IPO timetable and hence the execution risks.

When the banking syndicate's analysts have upstream access to information, certain principles must be followed:

• An initial meeting, exclusively for the analysts of the banking syndicate members, may be held prior to the announcement of the proposed IPO and therefore of the main characteristics of the transaction (intention t float or ITF) or the approval, where applicable, of the registration document or the prospectus, subject to a confidentiality undertaking that complies with the "information barriers" procedures in place (Article 315-1 of the AMF General Regulation) to enable these analysts, whose research reports need to be published during the investor "education period", to start their work upstream and finalise their reports very quickly after the ITF or, where applicable, after approval of the registration document.

  The AMF draws issuers' attention to the fact that the documentation (draft prospectus in particular) should be sufficiently advanced to allow this meeting exclusively for syndicate member analysts to be held during the period when the prospectus or registration document is being scrutinised by the AMF (in particular with regard to all the information needed to assess the contemplated IPO, including the strategy, financial statements, presentation of results, and the "trends" and "forecasts" sections). In any event, if significant changes occur between the initial presentation to analysts and the information ultimately presented in the registration document, it is the responsibility of the syndicate member banks and the issuer to ensure that the amended information has been brought to the attention of the participants of this meeting.

  Furthermore, equality of information must be re-established no later than the date on which trading begins on the market to which the securities are admitted. In addition, where this is necessary in application of the rules on market abuse when there are other related securities already admitted to a market (for example, where the issuer is a subsidiary of a listed company or where the issuer has already issued listed bonds), a press release published before that date or, where applicable, the registration document approved by the AMF, discloses, before publication of the research reports, any inside information that may have been communicated to the analysts of the syndicate members during the aforementioned process.

• If the issuer decides to organise a second information session, after approval of the registration document, dedicated to all financial centre analysts likely to be interested, enabling them to benefit from an in-depth discussion with senior management before the launch of the transaction, under no circumstances may this meeting contain less information than the first. This exchange can take the form of a physical meeting or a conference call, depending on the number of analysts involved.
• This possibility must not affect the holding of an open meeting to present the offer to the financial community, which the issuer may wish to organise in particular under the aegis of the Société Française des Analystes Financiers (SFAF), and which is held at the time of the launch of the offer.

3.5. Maintenance of the ISP certificate and auditors' completion letter

The requirement to provide the AMF with a certificate from the investment services provider (ISP) managing the IPO^[13] and a completion letter from the statutory auditors is specific to France.

The investors consulted insisted on maintaining the statutory auditor and ISP certificates, which are seen as a guarantee of the quality of the information provided in the prospectus. The AMF, for its part, can but note the usefulness of the due diligence carried out by banks and statutory auditors in providing these assurances.

Given the reassurance that the ISP certificate and the auditors' completion letter can provide as regards the quality of the information in IPO prospectuses, there are no plan to abolish the requirement to file these documents to the AMF.

4. What flexibility should be afforded to the timetables for execution and for setting the FINAL terms?

4.1. Flexibility in the prospectus approval timetable for different types of operation

The European regulations stipulate that, in the event of an IPO that takes the form of an offer to retail investors and a placement with qualified investors, the AMF-approved prospectus is required both for the public offering and for the admission of the issuer's shares, for IPOs on Euronext Paris. Consequently, the prospectus must be made available to the public prior to the launch of the offer.

The simplified timetable below sets out the main stages involved in executing an IPO on Euronext Paris with an offer to retail investors and placement with qualified investors:

In the absence of a retail tranche, which is now optional, several timetables for approving the listing prospectus, tailored to each operation, are permitted.

If the issuer opts for approval of the prospectus when the final terms of the offer are set (a posteriori approval), it may ask the AMF to confirm that it has completed its examination of the IPO prospectus (excluding the final terms of the offer).

The simplified timetable below sets out the main stages involved in carrying out a proposed IPO on Euronext Paris with placement with qualified investors, with prior request for confirmation of the completion of the examination by the AMF and then a posteriori approval of the prospectus when the final terms of the transaction are set:

This confirmation of the end of the AMF examination (subject to any new event) implies that the information in the prospectus will not be modified, with the sole exception of the final terms of the offer, between the launch of the placement and the approval of the prospectus by the AMF when the final terms of the offer are set, once bookbuilding has been completed.

If the prospectus is approved before the start of the placement (a priori approval, as has historically been the practice in France), it is desirable that AMF approval of any supplement to the prospectus, if necessary, can be obtained within a timeframe that is compatible with the rapid completion of the transaction. In these crisis situations, which are still exceptional and entail changing the parameters of the operation during the course of the operation, the regulator has been able to respond to proven emergencies.

4.2. Flexibility in pricing policies: removal of rules governing the price range

In accordance with the Prospectus Regulation, the prospectus approved by the AMF for initial public offerings must, as a minimum, indicate the maximum price of the securities offered, insofar as this is available. Furthermore, it is recalled that, In its Position-Recommendation DOC-2020-06, the AMF recommended that "no later than three trading days before the offer closes, the market should be informed of a price range of no more than +/- 15% either side of a base price".

The issuer, on the basis of the recommendations of its advisors, may indicate an indicative price range for the securities offered.

If a maximum price or an indicative price range is communicated at the launch of the IPO, this information must be relevant, and consistent both with the other information presented in the prospectus and with market practices. In effect, for an IPO, this maximum price or range is the only reference price.

In addition, where a proposed IPO involves raising funds (issuing new securities) and the prospectus only presents a maximum price at the launch of the offer, the amount of the funds ultimately raised must not be such as to lead to significant changes in the characteristics of the operation as announced, particularly as regards the reasons for the offer and the use of the proceeds. Otherwise, in the event of a significant change in the announced characteristics of the IPO, and in the event of an offer of securities to the public, a period of at least three trading days during which orders may be cancelled commences, in accordance with the regulations.

In any event, pursuant to Article 17 (2) of the Prospectus Regulation, the final price must be made available to the public without further approval, provided that it is not such as to result in a significant change in the other characteristics of the transaction, in particular the reasons for the offer and the use of the proceeds.

The AMF's recommendation as regards the system to limit the price range to a maximum of +/- 15% around a base price is now considered irrelevant, as it is too wide in light of market practice. Therefore it has been deleted.

4.3. Price range assessment criteria maintained

With regard to the conditions for determining the price within the meaning of Article 17 of the Prospectus Regulation and point 5.3.1 of Annex 11 of Delegated Regulation 2019/980, the AMF recognises that issuers may use the bookbuilding procedure as the method for determining the final price, provided that the maximum price or the price range is indicated at the time the offer is made to the public, i.e. in the prospectus approved by the AMF.

Issuers may nevertheless, on a voluntary basis, continue to present in their prospectus information for assessing the price or the price range, in particular by relying on approaches based on criteria such as multiples of comparable stocks, discounted cash flows, sums of parts, or multiples associated with operations involving comparable companies.

Reference texts

• This communication updates and replaces the information on initial public offerings set out in the guide to preparing prospectuses and disclosures for public offerings and the admission of financial securities (pages 83 to 86 - Position-Recommendation DOC-2020-06) and updates and replaces the information contained in AMF Instruction DOC-2020-05 (Access by the financial analysts appointed within member institutions of the syndicate to information prior to prospectus publication). This communication will subsequently be integrated and consolidated into the guide to preparing prospectuses and disclosures for public offerings and the admission of financial securities, as part of the planned update of said guide to take account of the entry into force of the latest European legislation.
• Articles 223-10-1, 315-1 and 315-6 of the AMF General Regulation