As part of the UK Government’s ongoing drive to make the London Stock Exchange more attractive to issuers considering a listing, the FCA has published a series of ‘engagement papers’ to shape discussions with market participants.
The first of these engagement papers concerns admission to trading on a regulated market and addresses the question of Prospectuses.
What are the key takeaways and what impact will they have on IPO (as opposed to secondaries) Prospectus production?
- There’s currently no suggestion of a wholesale move away from the current UK Prospectus Regulation requirements, nor in the sequencing of information in the Prospectus, its format or overall responsibility for its contents;
- Changes to Prospectus disclosure, however, may be necessary to fall in line with the proposed relaxation of the financial track record eligibility requirement;
- The FCA is considering whether to introduce specific requirements for disclosing ESG measures in the Prospectus;
- Shortening the current ‘six-day rule’ for retail IPO Prospectus availability to three days before the end of the offer period would provide greater flexibility for IPO candidates; and
- The FCA is also seeking views as to whether the Summary should remain and, if so, what form it should take.
What impact would these have on production of the IPO Prospectus?
While it’s difficult to tell what impact these will have, in our view it’s likely that the need for ensuring adequate investor protection at IPO would still entail substantial disclosures, so the pagination of the Prospectus is unlikely to be shortened. Production of the Prospectus, in terms of typesetting and printing, would largely be unaffected.
The need for greater ESG disclosure, however, raises the question of further information and how best that should be displayed. Would there be a requirement for additional charts, graphs or infographics along the lines of those disclosed in Corporate Reporting and annual financial statements? If so, this would increase the time taken at the initial typesetting stages.
The FCA’s deadline for views from market participants extends until 29th September 2023 – you can find out more here.