Capital Markets Activity Slows As Regulatory Changes Appear On The Horizon

After a frenzied 18-month period for the capital markets in Canada, 2022 saw a rapid about-face in activity levels, with initial public offering (IPO) and follow-on activity declining to the lowest level in years. Global unrest, economic uncertainty, rising interest rates, sustained inflation and disappointing results for many issuers who completed an IPO during the prior period resulted in a softening of demand and investors pulling back from making new investments. This pullback occurred even though Canadian regulatory authorities continued to take steps to reduce the regulatory burden for issuers with a view to making it easier to both raise capital and carry on business while also seeking to protect investor interests.