Primary Market Bulletin 44

The Financial Conduct Authority (FCA) has published market guidance for issuers on a range of topics in Primary Market Bulletin 44 (PMB 44).

Multimedia in RIS announcements

The FCA believes that the inclusion of multimedia content in regulatory announcements creates a risk of harm to market users due to a potential reduction in clarity, particularly if it makes it less clear to the reader what is regulated information and inside information. It also says there is a risk that announcements containing multimedia content could breach its rules, including the requirement in DTR 6.3.5 for an issuer to communicate regulated information in unedited full text, and UK Market Abuse Regulation (UK MAR) Article 17(1), which says that issuers should not combine the disclosure of inside information with marketing.

New diversity disclosures

The FCA reminds issuers of its expectations in relation to its new diversity and inclusion reporting requirements, including setting out some steps it considers will help companies get ready to make the relevant disclosures (read more on the new reporting requirements in our blog here). The FCA also sets out its supervisory strategy for monitoring and enforcing compliance with the new rules, stating it may ask companies to take corrective action where necessary, such as enhancing their disclosures in subsequent annual financial reports.

Prospectus for scheme of arrangement

In August 2020, the FCA published for consultation a proposed new technical note on when a prospectus is required where securities are issued pursuant to a scheme of arrangement. In particular the draft note said that if a shareholder is being asked to make a choice between different forms of consideration, for example where a scheme includes a mix and match facility which offers shareholders a choice between shares and cash, in the FCA’s view, a prospectus should be produced (read more on our blog here).

In PMB 44 the FCA says that, having considered the consultation responses, it will not publish the proposed technical note. The FCA notes that respondents to the draft note disagreed with its view and recognises that the question of whether a prospectus is required is a question of law and ultimately is for the courts to decide.