The World Federation of Exchanges has introduced a new benchmark to measure how difficult it is for companies to go public across different stock markets. In a policy paper published in February 2026, the WFE unveiled the Listing Stringency Index, or LSI, built from survey data covering 40 member exchanges.
The purpose is comparative rather than prescriptive. WFE says the index is meant to help regulators, exchanges and market participants assess how listing frameworks balance market access with investor protection, without promoting a single model as the right one.
A score built around nine listing dimensions
The LSI uses a 0 to 100 scale and evaluates exchanges across nine regulatory dimensions: financial thresholds, voting rights, IPO fees, share price and distribution, corporate governance, disclosure, operational requirements, regulatory approvals, and tax incentives or obligations. Each item is scored on a binary basis, so the index captures how broad the rulebook is rather than how aggressively rules are enforced.
According to the paper, the average score across surveyed exchanges sits in a middle range, suggesting that most markets operate with moderately comprehensive listing frameworks. WFE says IPO fees and disclosure requirements are the most widely used dimensions. Financial thresholds such as minimum revenue or profitability tests, along with voting-rights restrictions, appear much less common, pointing to uneven tolerance for early-stage and high-growth issuers across markets.
Advanced and emerging markets show different patterns
The study highlights a clear divide between advanced economies and emerging and developing markets. Exchanges in advanced economies tend to cluster in a narrower band, generally between 55 and 75, which suggests a more harmonised approach to listing design. Emerging and developing economies show a much wider spread, from highly permissive frameworks to some of the most restrictive cases in the sample.
WFE links that spread to differences in policy priorities, including access for smaller firms, the level of investor protection, and the maturity of domestic institutions. On a regional basis, APAC exchanges post the highest median LSI readings, reflecting stronger emphasis on governance, disclosure and operational compliance. The Americas show the tightest distribution, while EMEA covers a broad range from established European venues to lighter-regulated frontier markets.
What exchanges actually require in practice
Looking at the underlying components, the index shows that exchanges do not operationalise IPO oversight in the same way. Minimum free-float rules are common, and minimum market-capitalisation tests also appear across many venues. By contrast, requirements for positive cash flow, minimum share price, or assurances related to business continuity and operational resilience are far less universal.
Disclosure stands out as the most consistent category. The paper says all participating exchanges require issuers to disclose material changes during the listing process, and many also mandate ongoing transparency after admission. Operational resilience rules, by comparison, reach a narrower share of the sample, reflecting different views on which risks should be addressed at the listing stage.
Stricter regimes are linked to larger IPOs
One of the paper’s key findings concerns outcomes. Cross-exchange analysis shows a statistically significant positive relationship between higher LSI scores and larger average IPO size. The relationship with IPO frequency is also positive, but weaker and not statistically significant.
In practical terms, stricter listing regimes appear to attract fewer but larger issuers, while more flexible frameworks may widen access to public markets without necessarily shrinking deal size. That trade-off sits at the center of the study: exchanges can open the door to a broader issuer base, or they can maintain tighter entry standards that tend to appeal to more established companies.
Listing rules have kept changing over 15 years
The paper also tracks regulatory changes over the past 15 years. Among the 40 surveyed exchanges, some tightened their rules, especially around ESG disclosure and corporate governance. Others eased requirements, most often by lowering minimum share-price thresholds or free-float requirements. WFE says those changes were frequently introduced to improve access to public markets for smaller firms and startups.
The federation also cites related research indicating that such relaxations are associated with statistically significant increases in IPO participation and capital raised. At the same time, WFE stresses that the LSI is a benchmarking tool, not a reform manual. Its role is to give regulators and exchanges a consistent basis for comparison as they assess their own position, track global trends, and examine how listing rules affect inclusivity and capital formation.