UK FCA consults on changes to information flows for UK equity IPOs

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/14, setting out proposals to amend its rules on information sharing during UK equity initial public offerings (IPOs). The FCA proposes to amend its conduct of business sourcebook (COBS) to: (i) remove the mandatory seven‑day waiting period between the publication of an approved registration document or prospectus and connected research, and; (ii) repeal the related requirements mandating that syndicate banks intending to publish connected IPO research share the same information with a range of unconnected analysts, as they do with their own research analysts. The FCA considers that the current regime, introduced in 2018 to encourage the production of unconnected research and mitigate conflicts of interest, has not achieved its intended effects and has instead lengthened IPO timelines, increased costs and exposed issuers to additional market risk.

The consultation also proposes a technical correction to COBS 12.2.21R. The correction addresses an inconsistency resulting from earlier changes made to the FCA rules when the UK MiFID Organisational Regulation (on-shored Regulation 2017/565) was revoked and its requirements transferred into FCA rules.

Finally, the FCA is seeking feedback on further potential reform, and the consultation paper includes discussion questions on alternative approaches to the timing of publishing an approved prospectus or registration document in conjunction with connected research, and restrictions on pre-mandate analyst/issuer communications.

The deadline for responses is 29 May.

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