Draft Regulations to create framework for new prospectus regime laid before Parliament

A draft of the Public Offers and Admissions to Trading Regulations has been laid before Parliament. The Regulations will replace the UK Prospectus Regulation (which derives from the EU Prospectus Regulation) and create the framework for a new UK prospectus regime.

The Regulations were published in near-final form in July 2023 (see our blog post here) and represent the next step in the process to legislate for a new UK prospectus regime, one of the recommendations of the 2021 Lord Hill UK Listing Review (read more in our blog post here).

Key points to note on the new UK prospectus regime are:

• prospectuses will remain a key feature of an IPO in the UK;
• the FCA will be given discretion to determine when a prospectus is required but, for a listed issuer, a public offer to its existing shareholders will not of itself require a prospectus;
• the overarching requirement for a prospectus to contain “necessary information” will be retained, but the FCA will be given power to make rules on the detailed disclosure requirements; and
• liability for forward-looking information in a prospectus will be aligned with liability for other listed company published information: liability will only be incurred when those involved are reckless.

Whilst these Regulations create the framework for the new regime, the detailed requirements will be set out in new FCA rules. The FCA has already sought views on the exercise of its rule-making powers through a series of engagement papers – for example on when a prospectus should be required for a further issuance of equity securities by a listed company and the contents requirements for a prospectus (see our blog posts here and here for more detail on these engagement papers).

The FCA is expected to publish a formal consultation on the detailed rules in the first half of 2024. The new regime will come into force after the FCA has completed its consultation exercise.