The role of unconnected research in the UK IPO reforms

The role of unconnected research in the UK IPO reforms

Published on 15 October 2018

From 1 July 2018, the UK’s financial regulator, the Financial Conduct Authority (FCA) introduced new provisions on the availability of information in the UK equity main market IPO process. The changes are intended to improve the range, quality and timeliness of information made available to the market and, in particular, to restore the centrality of the registration document or prospectus in the overall process.

The reforms affect the order in which information is released to the market, with the registration document or prospectus now published ahead of the Intention to Float (ITF). Furthermore, issuers who brief the syndicate analysts are required to invite or hold a second briefing for unconnected analysts or, as a minimum, share all information given to connected analysts with unconnected analysts. This means the entire IPO process is played out in the public domain, opening it up to a wider group of potential investors (and wider market commentators). A separate Conduct of Business Sourcebook (COBS) provision also puts new restrictions on investment banks, which will no longer be able to wall cross in-house analysts during the beauty parade for advisory mandates.

The reforms require equality of information between connected and unconnected analysts, and change the timing of when research can be issued to the market.

We can provide unconnected research services across the entire IPO process, from initial preparations through to a first day of dealings report. Our research reaches the whole market, including retail investors, as it is MiFID II compliant, being free of charge to all readers.

Download PDF

Latest

Edison Explains: Semiconductors

Semiconductors are one of the foundations of modern computing, yet few people understand how they work or how the market operates. With US tariffs on China and warnings of an oversupply, how likely is a semiconductor downturn?

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free