Capital markets archive

Prospective financial information: treat the future with care

  • With significant M&A and takeover activity taking place, companies need to watch out for the rules on profit forecasts, merger benefits and prospective financial information.

Enhancing the effectiveness of the UK Listing Regime

  • Financial Conduct Authority proposed rules to apply to all premium listed companies
  • Those with a controlling shareholding will need an ongoing independence agreement
  • Two votes are needed when listings are cancelled or moved
  • Comment deadline is 5 February 2014 – final rules in force by the end of 2014

Institute of Chartered Accountants in England and Wales (ICAEW): preparing new pro forma guidance

  • Exposure draft expected shortly

Changes to the Takeover Code

  • Takeover Panel has published changes that apply 30 September 2013
  • Major changes include: quantified financial benefits statements and profit forecasts
  • Changes will need more consultation with Panel than before

Other updates – look out for unexpected consequences

  • Consider impact of small changes to: Listing and prospective rules; ESMA consultation on prospectus supplements; FCA response on significant shareholders
  • Responses to FCA’s consultation due by 14 June 2013

UK Listing Authority is now part of the FCA

  • FSA split from 1 April 2013 – now FCA and PRA
  • Expect sharper focus on companies’ responsibilities under Listing Rules

High Growth Segment rules effective

  • Rules effective March 2013
  • Final rules are in line with proposals apart from reverse acquisition must be conditional on shareholder approval

ICAEW guidance on financial position and prospects

  • Guidance published in February 2013
  • Relevant for listed companies making acquisitions.
  • Companies considering IPOs will need to prepare risk assessment

LSE proposes new ‘high growth segment'

  • Stock exchange has proposed new ‘high growth segment’ in Main Market - targeted mainly at expanding technology companies
  • Open in March to European issuers - market cap. min £300m

Government proposals for fast track IPO

  • Consultation expected from the FSA covering: free float; eligibility; and reporting requirements

Guide on position and prospects expected

  • ICAEW’s final guidance on financial position and prospects expected shortly

Takeover Panel activities

  • Panel considering responses to consultation on profit forecasts
  • The panel found operaton of 2011 rule changes satisfactory

Listing rule changes now effective

  • FSA’s changes to listing rules became effective in October 2012
  • Main changes on benefit statements for acquisitions and tightening of the sponsor regime.
  • New rules largely reflect current practices

New proposals tackle listing regime quality

  • FSA says most premium listed companies will already comply
  • Proposal to codify board composition may not be welcomed by supporters of ‘comply or explain’ option in the governance code