The Stock Exchange Issuer Playbook
Why getting the basics right is what actually matters
Many stock exchanges around the world invest in ensuring their listed companies are well-supported. When I say "well-supported," I mean that companies feel they are getting value for their annual listing fee, especially for mid and small-cap names, where trading volumes are scarce. The department responsible for "all things capital markets" is usually the investor relations (IR) team, typically under the umbrella of the CFO and this is where the dialogue coverages.
The types of activities stock exchanges offer to their issuers vary by market. A few examples: Nasdaq (through its acquisition from Thomson Reuters in 2012), LSE, or Euronext develop their own tools and programs, which they not only offer to their listed companies but also to other interested parties. NYSE has close partnerships with a few selected IR providers. Moscow Exchange, before it became uninvestable after the war started, hosted a very well-attended IR academy for its tightly knit IR community. GPW in Poland launched the IR Excellence Programme, which surveyed IR websites, where I was personally involved. Both of the UAE exchanges, DFM and ADX, collaborate with brokers and organise investor conferences in Europe, the US, and Asia. Saudi Exchange published a well researched IR Guide for all its listed companies, featuring case studies and process toolkit. And most work with or at least pay lip service to promoting IR and corporate governance best practices through local bodies such as IR Societies.
Essentially, for exchanges, it boils down to two things. First, ensuring that companies’ IR and corporate governance practices are aligned (or as close as possible) with global best practices, making them more attractive to widest possible pool of investors, thereby increasing trading volumes, which then benefits the exchange financially. Second, finding new revenue opportunities. Given that listed companies are "locked in" to a trading venue in a constantly evolving capital market, there are surely (at least in pricinciple) ways to offer value added services to would enhance the given company’s standing in the market.
The first point sounds complex, but if we flip the coin and ask institutional investors what they expect from an exchange and its listed companies, the answers are astonishingly simple; they want to invest in a market where all listed companies have :
1) all the essential material required to analyse the company on their website (quantified to about 8 elements, below), and
2) someone who responds to an email when they request a meeting or call.
It's surprising that, as of writing, no exchange can confidently claim it checks both of these boxes or "underwrites" these elements for all its listed companies. While many platforms (including Bloomberg) and exchanges have added a "contact IR" button, the real challenge lies in getting a response from any company approached for an investor meeting and ensuring that every company under its umbrella maintains a website with basic but essential information.
So this post can serve as an open invitation to any exchange: if they can master these two seemingly simple areas for all their listed companies and maintain them consistently, they would meet the vast majority of market participants' expectations from issuer services teams and become the world’s first truly investor-friendly venue.
And once that is sorted, it could explore other ways to provide value to their listed members. There is no shortage of ideas here, but those could effectively fall into four categories: tools & data, ongoing education, networking, and investor access.
These address the questions issuers most frequently ask, such as:
How do I learn and keep up with market trends & best practices?
How can I raise my visibility and access investors?
What tools should I use to to get the job done?
How can I meet relevant people in my industry?
How do I see my shareholding trends?
I could envision a modern exchange hosting an active curriculum of events, including thematic capital markets workshops, opportunities to meet investors, and offering software tools developed either in-house or with third-party partners, through a marketplace while making use of all the data it sits on.
The ultimate goal would be for this exchange to become the epicentre of all capital market activities for companies—a modern-day Agora—where participants can engage in discussions to enhance market attractiveness. At the same time, each participant should be equipped and sufficiently empowered to present their own investment case and confidently and proactive engage with investors and analysts around the world.