PS17/23: Reforming the availability of information in the UK equity IPO process

Show PS17/23 (PDF)[2]

The initial public offering (IPO) process plays a vital role in helping companies raise capital in the UK’s markets. Having gathered evidence as part of the market study into investment and corporate banking[3], our Discussion Paper on the availability of information in the UK equity IPO process[4] (DP16/3) identified some areas of the current process that called for improvement, namely the timing, sequencing and quality of information being provided to market participants.

In March, we published CP17/5[5] which consulted on changes to improve the range, quality and timeliness of information available to investors during the IPO process.

Following broad support for our proposals, this Policy Statement sets out final rules which seek to ensure that, before any connected research is released, a prospectus or registration document is published and providers of unconnected research have access to the issuer’s management. The Policy Statement also sets out new guidance to address the underlying conflicts of interest arising when analysts within prospective syndicate banks interact with the issuer’s representatives when an underwriting or placing mandate and subsequent syndicate positioning are being considered.

Ultimately, we want to see an IPO process:

• with enhanced standards of conduct during the production and distribution of connected research
• where a prospectus document plays a more central role
• where the necessary conditions exist for the emergence of unconnected IPO research

Who this applies to

Our proposals will affect:

• investment banks providing underwriting or placing services during equity IPOs and research services alongside securities offerings
• issuers
• investors
• independent research providers
• corporate finance advisers
• operators of regulated markets

Next steps

The new rules will take effect on 1 July 2018.