Reed Smith Client Alerts

The Financial Conduct Authority, the UK’s listing regulator, has published three engagement papers that discuss possible approaches to the proposed new UK prospectus regime for admission to trading on UK regulated markets. The FCA’s proposals form part of the government’s wider plans to make the UK markets a more attractive IPO venue for a broader range of companies, particularly high-growth companies.

Authors: James F. Wilkinson Delphine Currie Edmund Tyler


The FCA engagement papers follow on from the publication of the government’s proposals for the new UK public offers regime in March 2002 and subsequent regulations issued in draft (to be made under the Financial Services and Markets Bill, when this is enacted). Once finalised and in force, the regulations will set the framework for the new UK regimes for public offers and admissions to trading, and will replace the current regime in the Financial Services and Markets Act 2000 and the UK version of the EU-derived Prospectus Regulation.

Broadly, the new framework will consist of a general prohibition on offering transferable securities to the public in the UK, subject to specific exemptions. Key exemptions that are currently available will continue to apply, such as those for offers to qualified investors and fewer than 150 other persons, and offers to directors and employees, among others. However, there will also be new exemptions, including for pro rata offers to existing shareholders and offers made on FCA-regulated crowdfunding platforms (with the FCA determining the due diligence and disclosure levels required for offerings on these platforms).

Offerings of securities which are, or will be, admitted to trading on the London Stock Exchange’s main market and other UK regulated markets, or certain multilateral trading facilities (MTFs) such as AIM, will also be exempt from the prohibition on public offers. The FCA will determine and administer the admission and prospectus requirements for UK regulated markets. The FCA is also expected to have an oversight role in relation to some aspects of the rules of AIM and other MTFs for admission to their markets. In particular, an admission document for these markets may be classified as a form of prospectus, to which certain provisions in the proposed government regulations and FCA rules would apply (such as the responsibility, general disclosure standard and liability regimes). However, as now, AIM and other MTFs are expected to be able to decide the detail of their own admission and disclosure requirements, including the format and content of an admission document/prospectus.