Admission to trading on a regulated market – Engagement Paper 1

The Financial Conduct Authority (FCA) has published a so-called [Engagement Paper](https://www.fca.org.uk/publication/call-for-input/admission-trading-regulated-market-engagement-paper-1.pdf) in which the FCA seeks comments on a „new“ UK prospectus regime which the regulator will be entitled to deliver following the implementation of the Draft: Financial Services and Markets Act 2000 (Public Offers and Admissions to Trading) Regulations 2023. Latter is expected to come into force once the Financial Services and Markets Bill is passed by UK Parliament. According to the draft regulations, the FCA will be responsible for setting out admission rules, including rules on the format, content, and design of a prospectus, thereby eliminating the currently Retained EU Prospectus Regulation.
In this engagement paper now, the FCA seeks views on possible improvements to the current prospectus regime that will be helpful when drafting new admission rules. Specifically, the FCA would like to find out
– „When a prospectus should be required for admission to regulated markets or where exemptions should apply
– The required content of prospectuses for initial admissions
– The format of prospectus documents, and
– Responsibility for prospectus documents and how they are approved.“
The FCA’s key premise is that the current prospectus regime should be largely retained with targeted amendments only to
– improve practicability;
– improve usefulness;
– reduce burdens upon issuers when preparing a prospectus; and
– provide the necessary flexibility to issuers in prospectuses while keeping investors sufficiently informed to make well informed decisions.
Therefore, the regulator requests feedback on some key considerations when designing the new regime, including the following, among others:
– whether or not the current prospectus summary requirements should be upheld or whether or not modifications to the prospectus summary should be made to make them less tedious for issuers to prepare;
– whether or not the current content requirements of a prospectus as regards historic financial data should be retained;
– whether or not the FCA should regulate the incorporation of financial information by reference;
– whether or not changes must be made to the current rule which sets out that issuers may need to disclose relevant ESG matters in the prospectus (e.g. in case of material impact);
– whether or not this rule should be calibrated to align the disclosure requirements of listed companies with the general prospectus requirements;
– whether or not the FCA should set out a standardized format for a prospectus;
– whether or not the FCA should maintain the „Universal Registration Documents (URD“ which is rarely used in UK;
– whether or not the FCA should reduce the period during which a prospectus is available in connection with an Initial Public Offering (IPO); or
– whether or not the FCA should maintain the general validity period of 12 months for a prospectus.
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As these are some of the key issues, the FCA seeks feedback on, please refer to the original document for more detailed, comprehensive information.