UK Listing, Rules Disclosure Guidance and Transparency Rules

​An overview of recent developments.

Availability of information in the UK equity IPO process

On 26 October 2017, the Financial Conduct Authority (FCA) published its final rule changes which alter the timing, frequency and quality of information provided in connection with an equity Initial Public Offering (IPO) process and address conflicts of interest when analysts participate in discussions with a potential issuer pre-mandate stage (PS17/23). The new rules are substantially in the same format as proposed in CP 17/5 but with some amendments to reflect the responses received. (See "Reforming the availability of information in the UK equity IPO process: FCA publishes new consultation paper" for a summary of CP17/5.) 

The rule changes come into effect on 01 July 2018 to minimize disruption to existing or prospective IPOs and to allow time for the industry guidelines relating to unconnected analysts to be developed. The rules will only apply in relation to an IPO if all of the key events governed by the new rules (namely analyst presentations, the publication of a prospectus or registration document and the release of connected research) take place after 01 July 2018.

The main changes are:

  • a new requirement that an approved prospectus or registration document must be published and unconnected analysts must have had access to the issuer’s management before any connected research can be published, and
  • clarification that “participating in pitches for new business” (in COBS 12) includes where an analyst interacts with the issuer’s management, shareholders or corporate finance advisers before the firm has accepted a mandate to carry out underwriting or placing services for the issuer and the firm’s position in the syndicate has been confirmed in writing.

These changes apply to both premium and standard listings.

See “FCA rule changes alter the availability of information in the UK equity IPO process” for more information.

FCA review of UK primary markets

The FCA has published its final changes to the Listing Rules and new Technical Notes in response to its review of the effectiveness of primary markets (PS17/22), most of which are technical enhancements rather than fundamental changes and are predominantly in the same format as in the consultation (CP17/4). These changes took effect on 01 January 2018.

The FCA has also published its feedback statement to its discussion on the effectiveness of primary markets (FS 17/3) and is giving further consideration to certain points raised.

See "FCA review of the effectiveness of primary markets: minor rule changes and further discussion" for a summary of the Listing Rule changes and the topics the FCA has decided to give further consideration to.

FCA Quarterly consultation

On 01 December 2017, the FCA published its nineteenth quarterly consultation paper (CP17/39).  This includes:

  • a proposed change to the Listing Rules to add the words “or continuation” to Premium Listing Principle 6 (communication of information in such a way as to avoid the creation of a false market) to conform the wording to its predecessor, Listing Principle 4, and to ensure that it covers both the creation and the continuation of a false market; and
  • an amendment to the DTRs to clarify that the corporate governance statement (that must include a company’s diversity policy for financial years beginning on or after 01 January 2017) can be in a separate report published with the annual report or in a document published on the company’s website.

Comments were due by 01 February 2018.

New premium listing category proposal for sovereign controlled companies

On 13 July 2017, the FCA published a consultation paper on its proposal to create a new premium listing category for sovereign controlled companies (CP17/21).

The paper is in response to the initial feedback received by the FCA to the question about the creation of a distinct international listing segment in its discussion paper on the effectiveness of the UK primary markets landscape (DP17/2) - see below. Areas of concern among respondents include the need to maintain standards for premium listed companies and avoid introducing lower standards of regulation on the grounds of nationality. As a consequence, the FCA is bringing forward a more targeted proposal in respect of those companies with a substantial level of ownership by a sovereign country which it considers will make the listing regime work better for such companies, while ensuring standards of the regime remain high.

The consultation closed on 13 October 2017.

See “New premium listing category proposed for sovereign controlled companies” for more information.

Primary Market Bulletin No.18

On 31 August 2017, the FCA published Primary Market Bulletin No. 18. This edition provides feedback on changes to the FCA’s Knowledge Base proposed in Primary Market Bulletin Nos. 16 and 17. The FCA is also consulting on further changes to the Knowledge Base, including three new Technical Notes relating to certain sponsor obligations under the Listing Rules. Comments were due by 11 October 2017.

Consultations still outstanding from earlier PMBs are amendments to:

  • UKLA/TN/604.2 (PD advertisement regime) - have been postponed as it is likely to be affected by the FCA’s consultation paper on the availability of information in the UK equity IPO process
  • UKLA/TN/541.2 - have been postponed as discussions on whether the DTRs apply to global depositary receipts is still ongoing at EU level
  • UKLA/TN/202.2 (share buybacks with mix and match facilities) - as the FCA is still considering the feedback, and
  • UKLA/TN/306.2 as a result of MAR implementation - have been postponed as a result of further work the FCA is undertaking in this area.

See “Primary Market Bulletin No.18: new guidance on sponsor obligations proposed” and “Primary Market Bulletin No. 18: new technical notes confirmed and new sponsor technical notes proposed” for more information.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.