Guidance published explaining the revised IPO process

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New rules in the Conduct of Business Sourcebook took effect in July leading to significant changes in the timing, sequencing and documents required in the UK IPO process. Guidance has now been published outlining how syndicate banks can facilitate access to prospective issuers for unconnected analysts.

As reported in our June edition of Corporate Matters, the Financial Conduct Authority (FCA) has introduced new rules in its Conduct of Business Sourcebook (COBS). The aim of the new rules is to improve the range, quality and timeliness of the information that is made available to market participants during the initial public offering (IPO) process. The new rules apply to all IPOs where shares are admitted to trading on a regulated market in the UK (and therefore do not apply to IPOs on AIM or other multilateral trading facilities).

Under the new rules, unconnected analysts must be given the same access to, and information about, the IPO candidate as connected analysts and will have the opportunity to review an approved disclosure document containing key information on the IPO candidate to enable the unconnected analyst to produce pre-IPO research.

On 20 August 2018, the Association for Financial Markets in Europe (AFME) and the European Association for Independent Research Providers (Euro IRP) published guidance on how unconnected analysts can access issuer information in UK IPOs under the new COBS rules. The guidance seeks to assist market participants and Andrew Brooke, director of AFME’s Equity Capital Markets Division, said that “the guidance should facilitate the efficient and coordinated execution of UK IPOs”.

WM comment

These are significant changes to the IPO process which affect timing and the documents required. The full text of the guidance can be read here.