Committee Study Shows Weak Start to 2016 in U.S. Public Markets

CAMBRIDGE, Mass., May 3, 2016—U.S. capital market competitiveness showed startling signs of weakness in the first quarter of 2016.

“The competitive landscape of U.S. equity capital markets is off to a very disappointing start in 2016,” said Harvard Law Professor Hal S. Scott, Director of the Committee on Capital Markets Regulation. “Foreign companies, and now even U.S. companies, are choosing to raise capital outside U.S. public markets at staggering rates.”

The U.S. share of global IPOs by foreign companies amounted to only 2.5%. This is lower than the 3.6% recorded in 2015, which was the lowest annual share since 2008. This measure remains far below the historical average of 26.8% (1996-2007).

Foreign companies that raised equity capital in the United States in the first quarter of 2016 did so overwhelmingly via private rather than public offerings. Almost 95% of initial offerings of foreign equity in the United States were conducted through private Rule 144A offerings rather than public offerings. This measure of aversion to U.S. public equity markets remains near the record 96.6% observed in the first quarter of 2015, a level significantly higher than the historical average of 66.1% (1996-2007).

There was zero cross-listing activity in the U.S. by foreign companies. Based on the historical average of 17 per year (2000-2007), approximately 4 foreign companies should have cross-listed in the first quarter of 2016. The absence of companies seeking to list in the U.S. without raising capital provides further evidence that the U.S. regulatory climate is not attractive to foreign companies wishing to associate with more rigorous standards of conduct.

The percentage of IPOs by U.S. issuers listed only abroad jumped to 12.5% in the first quarter of 2016 after finishing 2015 at 4.3%. 2016 is strongly outpacing data from previous first quarters, as this measure reached a mere 2.4% in the first quarter of 2015, and only 1.6% in the first quarter of 2014.

The CCMR believes that the policy recommendations in its 2006 Interim Report remain essential to the restoration of U.S. competitiveness. “We urge regulators implementing the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act to minimize the adverse competitive effects of new regulations, particularly in areas where the U.S. regulatory approach differs significantly from competitor markets,” said Scott.
Historical data are available at


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A PDF of this data is available here.

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For Further Information:

Hal Scott,
Director, Committee on Capital Markets Regulation