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New Financial Conduct Authority (FCA) Conduct of Business Sourcebook (COBS) provisions will take effect

Published on 04 July 2018

On 1 July 2018, the FCA’s new COBS provisions improving the quality of information which companies are required to make available to market participants during a UK Initial Public Offering (IPO) will take effect.

Why does it matter?

Under the new rules a prospectus must be published before any connected research is released and providers of unconnected research must be given access to the management of the company offering its shares.
The new provisions are intended to:
  • restore the centrality of the prospectus as the main source of information to investors

  • make the prospectus available to investors earlier in the IPO process and provide a more diverse range of views on the issuing company’s prospects, and

  • improve the quality of research reports by introducing more competitive dynamics between connected and unconnected analysts.

The new provisions will need to be taken into account if you are considering a UK IPO. They will bring welcome improvements for individual retail investors participating in IPOs, or whose funds are being invested through institutional investors.

What action should you take?

  • Review the new COBS provisions and consider to what extent these provisions impact your business.
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