This chapter provides an overview of the regulatory frameworks governing equity markets for growth companies. It covers the key requirements for an initial public offering such as the preparation of a prospectus, approval for listing, financial and operational requirements, and adviser. It also discusses regulatory frameworks for already-listed companies, including the application of flexibility and proportionality in corporate governance rules, requirements to issue additional capital, frameworks allowing the transfer to main markets and delisting conditions. The analysis is based on the responses to the OECD Survey on Equity Markets for Growth Companies provided by regulators of 30 jurisdictions.
Equity Markets for Growth Companies
Abstract
A well‑designed regulatory framework balances the costs of compliance with the need to protect investor interests. Excessively stringent regulation can hinder companies’ ability to raise capital, while overly loose regulation can undermine investor protection. This chapter examines how different jurisdictions implement flexible and proportional requirements for companies accessing growth markets and compares these with the requirements applied to companies seeking admission to main markets. The chapter explores the different regulatory frameworks in areas including the IPO process, ongoing compliance requirements and corporate governance standards applicable to listed companies. The analysis draws on the responses from regulators in 30 jurisdictions to the OECD Survey on Equity Markets for Growth Companies (OECD Survey).
The IPO has long been a key milestone for companies seeking access to public equity markets. It provides an opportunity to raise capital, broadens the investor base and enables founders to realise a return on their investment. However, the IPO process is typically governed by a complex and stringent regulatory framework designed to ensure transparency and protect investors, which can represent a barrier for growth companies seeking to access public equity markets.
Equity markets for growth companies typically adopt a more flexible or proportional regulatory approach than main boards, allowing these companies to access equity capital with fewer barriers. The G20/OECD Principles of Corporate Governance (hereafter “the G20/OECD Principles”) recognise that it is essential to apply flexibility and proportionality in regulation based on various factors, including company size, development stage and control structure, to make market-based financing more accessible to smaller companies, particularly those in their early stages of development (OECD, 2023[21]). Equity markets for growth companies can create an environment where these companies can raise capital more easily, supporting entrepreneurship, innovation and economic growth.
Despite the more flexible and proportional regulatory framework of equity markets dedicated to growth companies, core requirements remain consistent with those mandated on main markets to ensure market integrity and investor protection. The OECD Survey shows that audited financial statements, having a prospectus and obtaining approval from the regulator or stock exchange are universally required (Figure 2.1). The prospectus provides comprehensive information about the company’s operations and audited financials, which helps investors assess the financial health and performance of the company. The review and/or approval of a listing by the regulatory authority or the stock exchange has been identified as a key requirement to ensure proper disclosure.
One key difference between growth and main markets is the requirement on minimum capital. While 24 surveyed jurisdictions have a minimum capital requirement for companies seeking to list on the main market, only 16 have the same requirement for growth markets. Moreover, for jurisdictions that have a minimum capital requirement for both markets, the minimum requirement for growth markets is generally lower. India is unique in that companies applying for listing on the growth market are subject to a maximum capital requirement rather than a minimum, with companies not permitted to have a post‑issue paid‑up capital exceeding INR 250 million (~USD 3 million).
Twenty-five jurisdictions impose a minimum free float level on companies seeking an IPO on main markets, and 23 on companies listing on growth markets. Maintaining an adequate free float level is essential to ensure that a sufficient proportion of shares are publicly available for trading, thereby increasing market liquidity, facilitating effective price discovery and reducing the risk of price manipulation by a small group of investors (El-Nader, 2018[22]). In addition, higher free float levels help to broaden the investor base and promote market efficiency. Free float requirements vary across jurisdictions, with main market companies generally subject to more stringent requirements than growth companies. For instance, in the United Kingdom, AIM imposes no minimum free float requirement, whereas the main market requires a minimum of 10%. Euronext’s third‑tier market, Euronext Access, also does not have a minimum free float requirement, although it does encourage companies to maintain a shareholder base large enough to support liquidity. In Croatia, while the main board requires a minimum free float of 25%, the Progress Market enforces a minimum free float of 10%. In Brazil, growth markets Bovespa Mais and Bovespa Mais Nível 2 require companies to achieve a minimum free float of 25% by the seventh year of listing. This phased approach allows companies to enter the market with a lower initial free float, giving them sufficient time to grow, build investor confidence and gradually increase their free float.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Another key area is financial performance requirements. Companies applying to list on main markets must often demonstrate a minimum level of financial performance, such as profitability or revenue generation. In contrast, growth markets are more likely to waive or relax such requirements to accommodate early‑stage companies. The OECD Survey shows that while financial performance thresholds are enforced on the main markets of 19 jurisdictions, only 11 jurisdictions impose similar requirements on growth markets.
An adviser model is more likely to be required on growth markets than on main markets. This is due to the role advisers play in guiding less mature companies through the listing process, ensuring they meet listing requirements and have proper corporate governance policies in place. Advisers are also essential in ensuring the credibility of companies that lack sufficient capital or a profitable business record. The OECD Survey shows that 19 jurisdictions require companies to have a adviser when seeking to list on growth markets, compared to 9 on main markets.
2.1.1. Prospectus
A prospectus is a fundamental requirement of an IPO as it provides potential investors with essential information about the company seeking to go public. It is widely regarded as the most important disclosure document, providing key details about the offering, the company’s history, financial performance, ownership structure and the risks associated with the investment. By ensuring transparency, the prospectus serves as a key tool for market participants to assess the merits and risks of a particular issue.
All jurisdictions covered by the OECD Survey require the publication of a prospectus for IPOs on the main markets and growth markets. A number of growth markets have introduced more flexible prospectus requirements to reduce the administrative burden on smaller companies and ease their access to capital markets. The OECD Survey shows that 22 jurisdictions have adopted simplified prospectus rules or allow exemptions for growth market IPOs under certain conditions, reflecting a broader trend towards proportionality in disclosure requirements (Figure 2.2).
One of the most common exemptions from full prospectus requirements is based on the size of the offering. A few markets allow companies raising smaller amounts of equity capital to benefit from reduced disclosure requirements, thereby lowering compliance costs while maintaining adequate investor protection. Under the EU Prospectus Regulation, issues below EUR 8 million may be exempt from full prospectus requirements, with member states setting their own national thresholds within this limit. For example, Bulgaria, France, Germany, Italy and Sweden apply the EUR 8 million threshold for the exemption, while Estonia and the Netherlands have opted for a lower threshold of EUR 5 million (ESMA, 2023[23]). Although smaller issues may not need a full prospectus, companies are usually required to provide an information document. The content and format of this document is regulated at the national level and generally includes key financial information and a business summary.
Prospectus exemptions also apply to issuers below certain size thresholds. For instance, in Indonesia, small and medium‑sized issuers, classified based on asset size and/or annual revenue, are subject to reduced prospectus content requirements under the Indonesian Financial Services Authority Regulation 54/2017. Similarly, in the EU and the United Kingdom, companies classified as SMEs can opt for the EU Growth Prospectus or the UK Growth Prospectus, both of which follow a simplified disclosure format designed to facilitate market access while ensuring investor protection.
In some markets, companies are exempt from publishing a prospectus if their offer is primarily targeted at qualified investors. Mexico, for example, introduced in 2025 a simplified regime that allows for the use of a simplified prospectus, aiming to encourage greater participation of SMEs in the equity market, provided the offering is exclusively targeted at institutional and qualified investors. In the United Kingdom, the AIM requires a prospectus only if the offer is made to 150 or more retail investors. As a result, and as indicated in the OECD Survey, companies often structure their offerings to avoid public placements with retail investors, thereby avoiding the prospectus requirement.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
In certain jurisdictions, more lenient disclosure requirements apply to specific growth markets. For instance, in the European Union, the EU Growth Prospectus is available to issuers on SME Growth Markets, a sub‑category of MTFs introduced under the Markets in Financial Instruments Directive II (MiFID II). Companies with an average market capitalisation of less than EUR 200 million have the option to use the EU Growth Prospectus when applying for a listing on SME Growth Markets and can benefit from a proportionate disclosure regime. In Japan, Malaysia and Thailand, the simplified format of the prospectus is only for IPOs on growth markets targeting qualified investors. For instance, in Japan, the third‑tier Tokyo Pro Market does not require a traditional prospectus in the same way as other public markets. Instead, companies are required to submit a simplified disclosure document known as the Tokyo Pro Market Information Memorandum, which is tailored to meet the needs of qualified investors. Similarly, in Malaysia, the LEAP market (third‑tier) which targets qualified investors, requires only an Information Memorandum, which generally contains less information compared to a prospectus. This filing is required to get approval from Bursa Malaysia instead of the Securities Commission Malaysia.
A standardised prospectus template is provided in 13 countries (Figure 2.3). Offering such a template gives companies clear guidance on the type of information required by regulators during the IPO, thereby smoothing the issuance process. For instance, in Argentina, the Comisión Nacional de Valores (CNV) requires a prospectus that follows a standardised format and provides clear guidance on its content, including on sections such as the issuer’s corporate background, a summary of the offering, risk factors, use of proceeds, and other key disclosures. In Canada, the Canadian Securities Administrators provides a detailed template (Form 41‑101F1) that includes the required disclosures, financial statements, risk factors and management discussions for IPOs on the Toronto Stock Exchange (OSC, 2025[24]). In the United Kingdom, the Financial Conduct Authority (FCA) is responsible for setting the format and content requirements for prospectuses of companies listing on the main markets. While the FCA does not impose a rigid template, it does impose minimum content requirements based on the type of security. As a result, issuers tend to follow a common format, which ensures consistency of disclosure while maintaining flexibility of presentation.
In some jurisdictions, regulators provide guidelines to assist in the preparation of prospectuses rather than requiring a standardised template. For example, the Australian Securities and Investments Commission (ASIC) does not prescribe a fixed format for prospectuses but provides comprehensive guidance on disclosure expectations under the Corporations Act. Similarly, the European Commission has enacted Regulation 2017/1129, which outlines the format and content requirements for prospectuses. This regulation serves as a framework to ensure consistency and transparency in disclosure practices across EU member states.
In Spain and Singapore, the regulator oversees the prospectus template for main markets, while the stock exchange is responsible for the template for growth markets. In Singapore, for example, the stock exchange provides templates for listings on Catalist as it sets the listing rules for the growth market. Meanwhile, the Monetary Authority of Singapore is responsible for the main market prospectus template.
It is also important to note that regulators often provide different templates for companies seeking to list on different market segments to reflect the lower requirements that apply to growth markets. For example, in Canada, companies seeking a listing on the TSX main board are required to file a full prospectus in accordance with Form 41-101F1, whereas companies listing on the TSX Venture Exchange may use a shorter-form document, such as Form 4H, designed for smaller issuers. In Thailand, the Securities and Exchange Commission issues Form 69‑1 for companies applying for an IPO on the main market and the second‑tier market MAI. In contrast, Form 69‑SME‑PO is for companies seeking an IPO on LiVEx, Thailand’s third‑tier market.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
2.1.2. Approval for listing
In many jurisdictions, approval is mandatory for any company seeking to be listed on either the main or growth markets. This approval can come from the regulator, the stock exchange or in some cases from both. The process generally involves meeting specific requirements to ensure that companies have sound financial performance and adhere to certain corporate governance standards. Additionally, the process examines whether the company’s disclosure meets the criteria for completeness and transparency, enabling investors to make more informed decisions. Regulatory frameworks differ across jurisdictions, with most regulators emphasising a disclosure‑based system while a few jurisdictions incorporate elements of a merit‑based system to ensure the issuer’s suitability for a public listing.
Under the disclosure‑based system, regulators focus on whether issuers have properly disclosed company information and do not make value judgments on the proposed IPOs, leaving investors to decide. The system operates under the principle that investors should make informed decisions based on full and accurate information rather than rely on regulatory bodies to assess the quality of an investment. For example, in Australia, the prospectus must be filed with ASIC but it doesn’t require approval. Instead, the prospectus is subject to a 7-day exposure period that can be extended to 14 days. The purpose of this exposure period is to allow ASIC to review the prospectus and decide whether to raise any concerns or request amendments. ASIC recently announced the possibility to allow for an informal review of the offer documents two weeks prior public lodgement, with the aim of reducing the exposure period (ASIC, 2025[25]). India follows a similar approach. The Securities and Exchange Board of India reviews the draft offer documents submitted by the company and provides feedback. This ensures that the offer documents are complete, accurate and compliant with all regulatory requirements before the public offer can proceed. In Canada, the prospectus is filed directly with the province’s securities regulator for its approval. The approval is mostly based on whether the prospectus includes, among others, detailed information about the issuer’s business operations, a thorough discussion of potential risks, and use of proceeds.
In contrast, a hybrid system combines disclosure-based transparency with qualitative regulatory assessments, incorporating elements of the merit-based approach. A few jurisdictions still use this system. For instance, in Thailand, the regulator’s approach ensures both the quality of the company and that the information disclosed is accurate. China has historically operated under a merit‑based system, where the CSRC assessed an issuer’s eligibility before allowing an offering to proceed. In recent years, China has transitioned to a registration‑based system, aligning it more closely with disclosure‑based frameworks. Under this approach, stock exchanges conduct the primary review of IPO applications, while the CSRC supervises the process, ensuring that the review was conducted properly and that issuers meet the fundamental conditions for stock offerings and listings (Chen and Zhao, 2024[26]).
According to the OECD Survey, 16 jurisdictions require approval from both the regulator and the stock exchange for companies seeking to list on growth markets, while 23 require dual approval for listing on main markets (Figure 2.4). In general, regulatory approval is more stringent than stock exchange approval. As growth markets tend to have looser listing requirements, they are more likely to require stock exchange approval only. For example, countries including Chile, India, Italy, Malaysia, Portugal, Spain and the United Kingdom require dual regulatory and stock exchange approval for main market IPOs, but only stock exchange approval for IPOs on growth markets.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
In 23 jurisdictions, there is a specific timeframe for the approval or review of IPOs (Figure 2.5). Certainty in the IPO approval or review process is essential for the effective functioning of the market, as lengthy periods can create uncertainty and increase the risk that market conditions will change unfavourably before the IPO is completed. To mitigate these risks, most jurisdictions set clear deadlines for the IPO approval or review process. In some cases, they also commit to shorter review periods to provide greater certainty to issuers and to allow companies to list when market conditions are favourable, to encourage more companies to go public.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
The length of the approval process varies across markets. In Brazil, the Comissão de Valores Mobiliários must approve IPO applications within 60 days, which includes up to three rounds of comments. The EU Prospectus Regulation (Regulation (EU) 2017/1129) sets an approval period of 20 working days from the date of submission for first-time issuers. Chinese Taipei has the shortest maximum approval period, with new issues having to be approved within seven business days. In Australia, the regulatory focus is on compliance with disclosure requirements and issuers are subject to a 14‑day exposure period from the filing of the prospectus. Similarly, the Monetary Authority of Singapore must register the prospectus within 7 to 21 calendar days from the filing date, with the possibility of extending this period to 28 calendar days. In Thailand, the regulatory approval process can take up to 165 days, one of the longest approval periods among the markets reviewed.
Some markets take a different approach. In Canada, there is no fixed time limit for an IPO approval. However, regulators, such as the Ontario Securities Commission, aim to issue an initial comment letter within 10 business days for at least 80% of all applications received, provided that the application is complete and in an acceptable format.
2.1.3. Financial and operational requirements
Audited historical financial statements are of fundamental importance in the IPO process, providing potential investors with a comprehensive overview of a company’s financial performance. These statements contain detailed information and metrics, enabling investors to assess the financial health of a company and make more informed investment decisions. In addition to disclosure requirements, certain regulators stipulate minimum financial performance thresholds, such as a specified net income or revenue level, as a prerequisite for listing eligibility.
Across markets, the requirements for audited financial statements tend to be more stringent for companies applying to be listed on main markets compared to growth markets. Main market issuers are typically subject to a longer history of audited financial statements. According to the OECD Survey, 25 jurisdictions require three years of audited financial statements, while Bulgaria mandates five years, Japan two years, and Chile and Mexico one year (Figure 2.6).
Equity markets for growth companies tend to require a shorter financial history. Among markets analysed, 6 require 3 years of financial statements, while 15 mandate 2 years and 8 require1 year maximum of financial information. For instance, in Korea, companies seeking to be listed on the main market are required to submit three years of financial information versus one year on the growth market KOSPI. In certain growth markets, such as in the United Kingdom, Singapore and Sweden, there is no requirement for a minimum number of years of audited financial statements. Instead, companies are required to work with an approved adviser during the IPO process, who evaluates their financial history and overall eligibility for listing.
In some jurisdictions, the length of historical financial statements required is the same for both the main and growth markets. For example, in China, companies listing on the STAR Market or ChiNext are required to provide three years of historical financial statements, the same as those listing on the main board.
Chile is the only jurisdiction where a longer history of financial statements is required for the growth market. ScaleX, the growth segment, requires companies to submit a minimum of three years of financial statements when applying for a listing, whereas the main market only requires the most recent financial statements. This difference reflects ScaleX’s strategic emphasis on high‑growth companies, which, to qualify for listing, are required to demonstrate an annual growth rate of at least 20% in either their number of employees or revenue.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Flexibility and proportionality are also applied in the financial performance requirements for listing on growth markets. In jurisdictions where main markets impose financial performance requirements, growth markets generally apply lower thresholds or do not impose requirements at all. In jurisdictions with a three‑tier market structure, such as Korea, financial performance requirements vary by market tier. The second‑tier market, KOSDAQ, imposes profitability requirements, whereas the third‑tier market, KONEX, does not mandate profitability. Moreover, China, Indonesia, Korea and Thailand allow unprofitable companies to list on certain growth markets, while listing on main markets requires companies to demonstrate profitability. In 11 jurisdictions (Brazil, Colombia, Croatia, France, Germany, Greece, Italy, Romania, Spain, Sweden and the United Kingdom), neither main nor growth markets require companies to meet specific financial performance criteria to be listed.
Note: Jurisdictions were allowed to choose multiple answers to this question.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
2.1.4. Adviser
The adviser model was introduced as a mechanism to balance investor protection with the need to reduce compliance burdens on companies aiming to list. While it may be referred to by different terms, such as certified adviser, nominated adviser, sponsor or listing agent, the underlying approach remains similar across markets. In this model, an external adviser, typically an authorised financial or advisory firm, assisting a company through the IPO process by conducting due diligence, ensuring compliance and mitigating risk for investors. The adviser’s primary responsibility is to guide the company through the IPO process, assessing its eligibility for listing and ensuring compliance with regulatory and stock exchange requirements. Advisers also play a critical role in reducing information asymmetries between the issuer and the public by overseeing the due diligence process. By performing these functions, advisers not only help companies navigate the complexities of an IPO, but also contribute to the integrity and stability of equity markets.
Adviser requirements are particularly common for growth markets, given the role of advisers in enhancing the credibility of issuers. Indeed, 19 jurisdictions require companies seeking to list on their growth markets to have an adviser (Figure 2.8). Of these, Hong Kong (China) and Thailand require advisers only for the IPO process, while China, Greece, Malaysia and Romania require advisers for both during the IPO process and a fixed period afterwards. Thirteen jurisdictions require advisers throughout the period of listing to ensure ongoing compliance and governance support.
Failure to appoint an adviser can result in the suspension or delisting of the company. The London AIM, for example, requires a company to have a nominated adviser (NOMAD) to oversee its regulatory obligations for as long as it remains listed. Between 2016 and 2018, 20% of AIM-listed companies were delisted because they were unable to appoint an adviser (LexisNexis, 2018[27]). The NOMAD provides support to the company before and after it is listed on the exchange. This system ensures that AIM‑listed companies receive ongoing supervision and guidance from approved financial experts, rather than being directly regulated by the UK financial authorities, allowing for a more tailored approach while maintaining investor protection (Gerakos, Lang and Maffett, 2011[28]).
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
The adviser model is less common on main markets, with only nine jurisdictions requiring advisers. For example, Euronext’s Main Market mandates the appointment of a listing agent during the IPO process. This listing agent, appointed by the issuer, assists and guides the company through the process to get listed on the Euronext regulated market. While Euronext Lisbon and Euronext Paris require a listing agent only during the admission phase, Euronext Milan follows a different approach (Euronext, 2020[29]). Under Italian regulation, the listing agent must remain engaged for one year following the IPO, providing continued support, including producing at least two research reports, as well as organising and attending at least two meetings between issuer management and professional investors (Borsa Italiana, 2025[30]).
In some jurisdictions, advisers are liable for the content of the IPO prospectus. This responsibility varies across markets, reflecting differences in regulatory frameworks and enforcement mechanisms. For instance, in Hong Kong (China), the IPO adviser, also referred to as IPO sponsor is seen as a “gatekeeper of market quality in an IPO” and ensures that the issuer’s prospectus is complete and accurate, therefore becoming liable for the quality of the prospectus (SFC, 2012[31]; Johnstone, Da Roza and Davis, 2015[32]). Similarly, in the United Kingdom, NOMADs are required to review and approve the content of an admission document before a company is listed. If misstatements are found later, the NOMAD can be held liable for regulatory breaches.
The Nasdaq First North Growth Market currently hosts nearly 500 listed companies and operates on a model inspired by the Nominated Adviser system used on the London Stock Exchange’s AIM. Like AIM, Nasdaq First North uses certified advisers who provide essential support to companies both before and after their listing. Each company joining Nasdaq First North must engage a certified adviser to guide them through the listing and compliance process. Certified advisers are authorised by the exchange and can be, for example, corporate finance firms, accounting firms or investment banks.
Once a company is listed, the adviser remains responsible for monitoring and guidance. This includes advising on the disclosure of information prior to public announcements and ensuring compliance with Nasdaq rules. If a company violates Nasdaq rules, the certified adviser must immediately notify Nasdaq and conduct the necessary investigation (Nasdaq, 2019[33]).
To become a certified adviser, a firm must apply directly to Nasdaq and meet certain requirements, such as maintaining independence from issuers, employing at least two experienced professionals and adhering to internal policies regarding stock trading. To prevent conflicts of interest, certified advisers are prohibited from owning 10% or more of the shares or voting rights of companies they advise. In addition, employees of a certified adviser firm may not hold shares in companies they advise. Moreover, owners and employees of a certified adviser are prohibited from serving as board directors, CEOs or deputy CEOs of their client companies. As of February 2025, there are 51 registered certified advisers operating across different Nasdaq Nordic markets (Nasdaq, 2025[34]).
Certified advisers are governed by Nasdaq, and the exchange has the power to impose sanctions or revoke their authorisation to act as certified advisers when there is a breach of the rules set out in the Nasdaq First North Growth Market Rulebook.
Certified advisers play a key role in the development of companies listed on the Nasdaq First North Growth Market. Their influence goes beyond regulatory compliance, as they actively assist companies in strengthening corporate governance and operations (OECD, 2025[35]). For example, certified advisers provide various trainings for board members and management, while equipping companies with useful tools such as financial reporting and board assessment frameworks. Through these services, certified advisers help companies build credibility with institutional investors, thereby improving their prospects for a successful transition to the main market, where they will be subject to higher regulatory standards and broader investor interest. Since the launch of Nasdaq First North, more than 130 companies have successfully moved to the Nordic Main Markets (Nasdaq, 2023[36]).
Companies already listed can raise additional equity post-IPO while continuing to meet ongoing obligations, such as complying with corporate governance standards and other regulations, to maintain their listing status. Failure to comply can lead to an unvoluntary delisting. Conversely, significant growth may allow a company to qualify for a main market listing, unlocking new opportunities.
2.2.1. Flexibility and proportionality in corporate governance framework
Flexibility and proportionality in applying corporate governance requirements (e.g. for board independence, disclosure items and the establishment of specific committees) can allow growth companies to access market‑based financing while adopting practices that are appropriate to their size and stage of development. According to the G20/OECD Principles, policymakers have a responsibility to establish a regulatory framework that is flexible enough to meet the diverse needs of companies operating in different circumstances. Reflecting this, most jurisdictions have adopted a flexible and proportionate approach to various aspects of their corporate governance regulation (OECD, 2018[37]). By tailoring governance structures to the development stage of the company, this approach avoids the imposition of rigid frameworks that can burden companies with excessive compliance costs, potentially stifling innovation and growth.
Among the jurisdictions surveyed, 22 have more lenient corporate governance requirements for growth companies based on either listing venue or company size (Figure 2.9). In 14 jurisdictions, the application of flexible measures depends on whether a company is listed on a designated growth market. For instance, in the Euronext market, companies listed on Euronext Growth are subject to less stringent ongoing obligations than those listed on the regulated market. In five jurisdictions, the size of the company is a determining factor, with asset thresholds commonly used. In Chile, for example, companies with assets of less than 1 million inflation‑linked units (~USD 40 million) benefit from reduced reporting requirements in their annual reports, regardless of the market on which they list. Similarly, in Korea, companies with total assets of KRW 500 billion (~USD 364 million) or less are subject to lighter ongoing obligations. In Indonesia, small and medium-scale issuers are regulated under OJK Regulation 42/2020, which provides exemptions from certain corporate governance requirements, such as the establishment of an audit committee and the disclosure of remuneration policies. In China, Germany and India, both listing venue and company size can be used as criteria for using flexible and proportional requirements. In six jurisdictions, there is no differentiation, and growth companies are subject to the same corporate governance standards as large companies.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Corporate governance requirements can be imposed through legislation, regulation, listing rules or through a “comply or explain” approach via a corporate governance code. In several jurisdictions, corporate governance rules outlined in national laws apply only to companies listed on regulated markets, while growth market companies are largely exempt. In Italy, for example, companies listed on the main market of Euronext Milan are subject to the full Consolidated Finance Act and its associated corporate governance rules. In contrast, companies on Euronext Milan Growth are only subject to selected provisions.
Another common way to introduce flexibility and proportionality into corporate governance is through listing rules, with companies listed on growth segments of stock exchanges often being subject to lighter listing rules. For example, Nasdaq Nordic applies different listing rules to its Main Market and the First North Growth Market. Companies listed on the Main Market must comply with comprehensive corporate governance requirements, whereas smaller, high-growth companies on First North benefit from a more flexible regulatory framework. This flexibility extends to board composition, committee structures and disclosure practices.
Flexibility and proportionality are also applied through the implementation of corporate governance codes. While companies on main stock exchanges are usually required to comply with the code or explain why they do not, this is not always the case for companies on growth markets. For instance, according to the Portuguese Securities Code, only companies listed on regulated markets such as Euronext Lisbon are legally required to adopt and report on a corporate governance code. Similarly, under the French Commercial Code, companies listed on regulated markets must state which governance code they follow and disclose any deviations in their annual governance report. Companies listed on MTFs are not subject to this requirement. Japan takes a different approach. Although companies listed on the Growth Market of the Tokyo Stock Exchange are subject to the Corporate Governance Code on a “comply or explain” basis, they are only required to adhere to the general principles in the Corporate Governance Code. Companies listed on the Prime and Standard markets must follow both general and supplementary principles.
Soft law instruments play a significant role in promoting flexibility and proportionality in corporate governance frameworks. A notable example is EU Recommendation 2005/162/EC, a non-binding measure offering guidance on the responsibilities of non-executive directors and board committees within listed companies. It applies specifically to companies whose securities are listed on regulated markets. It recommends EU Member States to integrate the Recommendation’s principles into national corporate governance codes for such companies, typically using a “comply or explain” approach. By contrast, companies listed on MTFs are generally not subject to these principles.
In a few jurisdictions with a three-tier market structure, flexible and proportional corporate governance requirements are applied exclusively to the third-tier market. For instance, in Malaysia, such requirements apply only to the LEAP Market, whereas companies listed on the ACE Market and Main Market are subject to the same corporate governance standards. Similarly, in Thailand, proportionate governance measures are implemented solely for companies listed on the third-tier platform, LiVEx.
According to the OECD Survey, growth companies in less than 30% of the jurisdictions are exempt from requirements related to board independence and disclosure on key corporate governance issues, including related party transactions, major shareholdings, and remuneration and remuneration policies (Figure 2.10).
Growth companies are required to establish an audit committee in only 17 jurisdictions, compared to 24 jurisdictions for main market companies. In Argentina, Chile, India, Korea, Portugal, Romania and Thailand, audit committees are required for larger companies or companies listed on the main market, but not for those listed on growth markets. In Argentina, for instance, the CNV Rules explicitly waive the requirement to establish an audit committee for companies listed on the growth market. In Korea, the requirement to establish an audit committee is triggered by company size thresholds, which in practice mainly affect companies listed on the main market rather than those on growth markets. Only seven jurisdictions require remuneration committee for growth market companies, compared to ten for main market companies. Notably, Chile, India and Spain mandate a remuneration committee for main market companies but exempt growth market companies from this obligation.
Note: For simplicity, “Main markets” and “Growth markets” are used in the legend. In practice, requirements depend not only on the listing venue, but also on company size. In jurisdictions with a three-tier market structure where the requirements vary by listing venue, the second‑tier market is treated as the 'growth market' in this analysis.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Generally, companies listed on growth markets are subject to less stringent board independence requirements than those on main markets. Specifically, some growth markets in 10 jurisdictions are entirely exempt from the requirement to appoint independent directors (Figure 2.11). In seven other jurisdictions, growth markets are subject to reduced requirements regarding board independence. These lower requirements may be implemented through legally mandated thresholds or via partial or full exemptions from the “comply or explain” approach to corporate governance codes.
In some jurisdictions, this flexible and proportional approach is embedded directly in legislation. For instance, Chilean company law stipulates that listed companies must appoint at least one independent director if their listed equity exceeds 1.5 million inflation-linked units (approximately USD 58 million). Companies below this threshold are exempt from the requirement. Similarly, under the Korea Commercial Act, listed companies with assets below KRW 2 trillion must appoint independent directors constituting at least one-quarter of the board. Those with assets of KRW 2 trillion or more must appoint a majority of independent directors, with a minimum of three.
More commonly, flexibility and proportionality in board independence requirements, which are often set out in corporate governance codes, are introduced through exemptions from these codes for companies listed on growth markets. Furthermore, many jurisdictions adopt a dual standard for board independence, setting a legally mandated minimum requirement for independent directors alongside more ambitious voluntary recommendations through corporate governance codes. As listed growth companies are often exempt from, or only partially subject to, corporate governance codes, they generally have lower board independence expectations. For example, in Romania, companies listed on the main market of the Bucharest Stock Exchange (BVB) are required to have at least one-third independent directors, as set out in the BVB’s Corporate Governance Code. This requirement does not apply to issuers on the growth market. In the United Kingdom, companies listed on AIM must follow a recognised corporate governance code on a “comply or explain” basis. Most AIM companies adopt the Quoted Companies Alliance (QCA) Corporate Governance Code, which recommends that companies have at least two independent directors. This recommended number is lower than that the one set out in the Corporate Governance Code adopted by companies listed on the main board, which stipulates that half of the board should be independent.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
To reduce compliance costs for smaller companies, 19 jurisdictions apply less stringent financial reporting requirements for companies listed on growth markets (Figure 2.12). In some cases, these measures apply specifically to third-tier markets, such as KONEX in Korea, LEAP in Malaysia and LiVEx in Thailand.
The most common form of proportionality in financial reporting relates to the frequency of disclosure. In 13 jurisdictions, growth market companies are only required to publish financial statements on a semi-annual and annual basis, rather than quarterly. This approach reduces regulatory burdens while maintaining transparency standards that are appropriate for smaller companies. For instance, in Chile, issuers on the ScaleX platform only have to publish annual financial statements, whereas main market companies are required to report quarterly. Similarly, in Sweden, quarterly financial disclosures are only required for companies listed on the main market of Nasdaq Stockholm. Companies listed on Nasdaq First North Growth Market are exempt from this requirement.
In 12 jurisdictions, alternative accounting standards are permitted for growth market companies. For example, in countries with Euronext exchanges such as France and Italy, while it is mandatory for companies listed on the main market to prepare financial statements in accordance with IFRS, companies listed on Euronext Growth or Euronext Access have the option to use either local GAAP or IFRS. In India, SME-listed issuers can report under Indian Generally Accepted Accounting Principles (Indian GAAP) rather than Indian Accounting Standards (Ind AS), which are broadly aligned with IFRS and more complex. Several other jurisdictions, including the United Kingdom (Aquis Exchange) and Chile (ScaleX), permit or encourage the use of IFRS for SMEs, a simplified international standard designed for smaller entities.
In addition to differences in accounting frameworks, 11 jurisdictions apply reduced content requirements to the financial statements of growth market companies. For example, companies listed on Malaysia’s LEAP Market are subject to fewer disclosure requirements than those on the main market. Furthermore, Croatia, Greece and South Africa offer certain audit exemptions for growth market companies. In Greece, for example, companies listed on the Athens Exchange Alternative Market are not required to obtain an audit opinion for their semi-annual financial statements.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Among the surveyed jurisdictions, 19 allow the issuance of dual‑class shares on main markets, 15 of which also allow it on growth markets (Figure 2.13). The primary advantage of dual‑class share structures is that they enable the founding family or controlling shareholders to raise public equity while retaining control over the company.
Dual‑class share structures typically follow one of two formats (Figure 2.13). The first format is multiple voting shares, where selected shareholders receive more votes per share, thereby increasing their influence compared to others. In Greece, Hong Kong (China), India and Singapore, multiple voting rights shares are only permitted on the main markets. In India, they are allowed under specific conditions, including that the company is a tech-driven company, and that the multiple voting right shares are issued only to founders who also hold an executive position within the company. The second format is loyalty shares, which grant long‑term shareholders increased voting power after holding their shares for a specified period. According to the OECD Survey, only one country (Japan) allows the use of loyalty shares on both main and growth markets, and only three (France, Italy and Spain) allow it only on the main markets.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Recent years have seen a trend towards greater regulatory flexibility regarding the use of dual‑class shares in growth markets. A notable development in this regard is the Directive (EU) 2024/2810, which was introduced as part of the EU Listing Act to facilitate multiple voting share structures for companies listed on multilateral trading facilities. The Directive requires EU member states to set a maximum voting ratio between multiple and ordinary shares, while offering optional safeguards such as sunset clauses that can be triggered by certain events, including share transfers or time‑based thresholds. Member states are required to transpose the Directive into national law/regulation by 2028, thereby allowing the issuance of multiple voting shares once the necessary legislative measures are enacted.
2.2.2. Follow-on offerings
The OECD Survey shows that all jurisdictions permit secondary public offerings (SPOs) and private placements as a form of follow‑on offerings on both main and growth markets. At the same time, the regulatory framework for follow-on offerings is similar in both main and growth markets. Only a few jurisdictions provide some flexibility for follow-on offerings on growth markets.
Both SPOs and private placements require companies to comply with key regulatory requirements. One of the most important of these is the disclosure of the purpose of the offer and the intended use of the proceeds. This requirement is enforced in 25 jurisdictions for SPOs (Figure 2.14). Companies must clearly explain why they are raising additional capital and how the funds will be used. This transparency allows investors to assess whether the equity issued is likely to contribute to long‑term value creation. Importantly, a well‑defined purpose for an SPO can increase investor confidence and have a significant impact on post‑offering performance. Although such disclosure is not strictly required in certain markets, such as the United Kingdom, companies often choose to voluntarily disclose their intended use of the proceeds. Research also suggests that companies that disclose investment‑related purposes for their SPOs tend to allocate proceeds more effectively and achieve better long‑term performance than those that cite general corporate purposes or recapitalisation (Silva and Bilinski, 2015[38]). Meanwhile, only 11 jurisdictions require this disclosure for private placements.
Like for IPOs, the issuance of a prospectus is often required for SPOs as it provides investors with key information. However, a few markets do not require a prospectus for an SPO. The OECD Survey indicates that in the United Kingdom, listed companies often structure their SPOs to fall under certain exemptions, such as below the regulatory threshold, to avoid the time and cost of preparing a prospectus. In Australia, companies on both regulated and growth markets can conduct a “low‑doc” public offering (i.e. without a prospectus) if they have complied with their continuous disclosure obligations. Otherwise, a prospectus is required. In Singapore, companies doing an SPO can be exempt from the prospectus requirement, while an offer information statement must be lodged either with Singapore Exchange (SGX) when listed on the SGX Catalist or the Monetary Authority of Singapore when listed on the SGX Mainboard. Unlike public offerings, private placements generally do not require a prospectus unless they are made to more than a certain number of investors.
Some jurisdictions also offer streamlined disclosure regimes for secondary public offerings. In the European Union and the United Kingdom, the EU Growth Prospectus and the UK Growth Prospectus can be used by companies listed on the SME Growth Markets. These prospectuses provide a simplified reporting framework, making it easier for SMEs to raise capital while ensuring transparency for investors. In addition, already listed companies are exempted from the requirement to produce a full prospectus, provided that the newly issued securities represent less than 20% of the total number of existing listed shares within a 12‑month period.
Approval from either a regulator or a stock exchange is required for SPOs in 26 jurisdictions, while only Australia, Japan and Singapore do not require it. Australia, Japan and Singapore have alternative oversight mechanisms and rely on existing compliance measures instead of requiring additional approval. In addition, 12 jurisdictions require the approval of either the regulator or the stock exchange for private placements. While SPOs are more likely to require regulatory approval, private placements typically only require stock exchange approval. In Canada, for example, private placements require stock exchange approval while SPOs require regulatory approval. This distinction reflects the different levels of scrutiny applied to different forms of capital raising, with SPOs generally subject to more regulatory oversight than private placements.
In most jurisdictions, either by legal mandate or stock exchange rules, shareholders are required to approve equity issues if they exceed a certain threshold of the company’s share capital, and the requirement is the same for both SPOs and private placements. In Australia, for example, companies can issue up to 15% of their share capital in any 12‑month period without requiring shareholder approval. In China, the issuance of new shares by a listed company is subject to a two‑step approval process: first, the board of directors must pass a resolution and notify the stock exchange within two working days; second, a general meeting of shareholders must be convened, where approval by a two‑thirds majority of those present is required. In Korea, shareholder approval is only required if the new shares are issued to parties other than existing shareholders. Diverse regulatory approaches reflect how jurisdictions aim to balance managerial flexibility and shareholder oversight.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Jurisdictions may also impose various regulatory requirements for follow‑on offerings, including registration with the regulatory authority, investor limits, minimum financial performance criteria and a minimum number of listing years. For example, in the case of SPOs, some jurisdictions require companies to meet certain financial performance thresholds, such as maintaining a minimum level of profitability, before they are eligible to issue new shares. These financial benchmarks are designed to protect investors and ensure that only financially stable companies can raise additional capital. In the case of private placements, companies are likely to be subject to a maximum number of investors allowed to participate.
Growth companies often raise additional financing through private placements. For example, companies listed on the Aquis Stock Exchange in the United Kingdom typically conduct follow‑on offerings through private placements due to their smaller size. Although no admission document is required, companies must submit a form to the exchange three days before the admission of new shares and announce the details of the fundraising. Private placements sometimes are subject to additional restrictions. In Korea, for example, while KOSDAQ allows listed companies to issue additional shares through private placements, the newly issued securities must be locked up for one year after issuance.
2.2.3. Transfer from the growth market to the main market
Growth markets can serve as a stepping stone for smaller companies to move to the main market by providing a platform to build financial strength, improve corporate governance and scale up before reaching a larger pool of investors. Therefore, it is crucial to have incentives or processes in place to help companies transfer to the main market once certain requirements are met. Indeed, successful growth companies often switch to the main market. In India, for example, 138 companies successfully transitioned from the SME board to the main board of the National Stock Exchange between 2015 and 2023 (NSE India, 2024[39]).
A well-designed regulatory framework for transfers is important to ensure a smooth transition from growth to main markets. According to the OECD Survey, 18 jurisdictions have adopted formal frameworks designed to facilitate this process. These frameworks aim to simplify regulatory procedures, reduce administrative burdens and provide incentives for companies that meet the listing requirements of the main market. For instance, in Singapore, companies listed on Catalist may apply to transfer to the SGX Mainboard provided they meet the prescribed quantitative requirements and have been listed on Catalist for at least two years. In Romania, the Bucharest Stock Exchange has established a framework that facilitates companies listed on the AeRO market to transfer to the regulated market, provided they meet the necessary listing criteria. China has introduced a framework to transfer from third-tier to second-tier markets. Eligible companies listed on the Beijing Stock Exchange (third-tier market) can transfer directly to the STAR market (second-tier market) of the Shanghai Stock Exchange or the ChiNext board (second-tier market) of the Shenzhen Stock Exchange. This reform removes the previous requirement for companies to delist and reapply, significantly streamlining the transition process.
In some jurisdictions, the absence of a direct transfer mechanism requires companies to undergo a full reapplication process. This approach increases administrative complexity and may discourage companies from transitioning to the main market despite meeting the necessary financial and operational requirements. In the United Kingdom, for example, companies listed on the AIM must delist and reapply for admission to the regulated market because there is no direct transfer mechanism. Similarly, in China, companies listed on the ChiNext board cannot transfer directly to the main board of the Shenzhen Stock Exchange and must instead delist and reapply. As a result, companies that continue to grow remain on the ChiNext board even though they meet the eligibility requirements for the main market.
A key measure adopted in several jurisdictions to support the transition from growth to main markets is the exemption or simplification of prospectus requirements. This measure aims to reduce administrative burdens and speed up the listing process for companies that have already demonstrated compliance with regulatory standards. According to the OECD Survey, seven jurisdictions have introduced simplified prospectus requirements for companies transitioning to the main market. In the European Union, the EU Prospectus Regulation allows for a simplified prospectus if a company has been publicly offered and admitted to trading on an SME growth market for at least two years and has fully complied with reporting and disclosure requirements. The EU Listing Act, which will come into force in 2026, will reduce this required period from two years to 18 months, further easing the transition.
Some jurisdictions have taken additional steps to waive the prospectus requirement altogether under certain conditions. In India, Germany and Malaysia, transfers from growth to main markets can be completed without the need for a full prospectus. For instance, in Germany, issuers whose securities have been publicly offered and traded on an SME growth market for 2 years, have fully complied with reporting and disclosure obligations, and seek admission to a regulated market may choose to prepare a simplified prospectus. Malaysia introduced an expedited transfer process in 2024, allowing companies that meet profit and market capitalisation thresholds to file an introductory document instead of a full prospectus.
Additional measures have been introduced to incentivise companies to move to the main market, including exemptions from regulatory approval requirements, reductions in listing fees and waivers of adviser obligations. In Brazil and India, listing on the main market normally requires regulatory approval, but companies transitioning from growth markets are exempted from this requirement. In Canada, companies moving from the TSX Venture Exchange to the Toronto Stock Exchange benefit from waived listing application fees, reduced documentation requirements and, under certain conditions, a waiver of adviser requirements. In Hong Kong (China), reduced listing fees are applied to facilitate the transition of growth market companies to the main board.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
2.2.4. Delisting conditions
Several triggers can lead to the delisting of companies from growth markets. According to the OECD Survey, the four main reasons for delisting are: (1) delays in the periodic disclosure of financial information (22 jurisdictions); (2) violation of minimum free float requirements (12 jurisdictions); (3) lack of advisers (12 jurisdictions); (4) false statements or adverse opinion from audit firms (12 jurisdictions) (Figure 2.16). Less frequently cited reasons for delisting include the violation of minimum trading volume or minimum trading stock price, and constant negative profits over a number of years. Although delisting triggers for companies listed on growth markets and listed markets are generally similar, growth markets often have less stringent delisting thresholds. For example, in Sweden, while both growth and main market listed companies are required to meet minimum trading volume standards to remain listed, the threshold in the growth market is lower.
Source: OECD Survey on Equity Markets for Growth Companies, see Annex for more details.
Importantly, delisting decisions are not based solely on these pre‑defined conditions, as regulators often exercise a degree of discretion in assessing whether a company should be delisted or not. In Spain, for example, companies facing delisting‑triggering events are not automatically delisted. Instead, a technical assessment is made, taking into account market conditions and the specific circumstances of the company. In addition, if a company fails to disclose financial information in a timely manner, regulators typically issue warnings or impose penalties as a first measure to enforce compliance with disclosure requirements. In Thailand, for example, if a company misses the deadline for filing its periodic financial statements, the stock exchange will suspend trading of the company’s shares. If the delay is more than six months from the due date, the company may face delisting.