Prospectuses

Question 1

When is a prospectus needed?

Answer 1

When securities are admitted for trading on a regulated market OR securities offer made to the UK public. So, are the securities going to be available and marketed to the general public. If yes, you need a prospectus that has been approved by the competent authority (primary markets division of the FCA)

Question 2

When are prospectuses exempt from being produced?

Answer 2

• Bonus issue, share split, or consolidation
• Exercise of conversion rights/warrants (if <20% of capital in one year)
• Small additional issues (less than or equal to 20% over one year)
• Small issues of <£1m
• Minimum subscription = €100,000
• Government bonds
• Private placement exemption

Question 3

If no prospectus is available, what rules needs to be followed?

Answer 3

If no prospectus, must follow an obligations under COBS 4 ‘Financial Promotions’

Question 4

What admission documents are needed for non-public offers on exchange-regulated markets?

Answer 4

• AIM and Aquis Exchange Growth Market are exchange-regulated markets
• Non-public offers on these markets require a simplified version of prospectus regulation rules (PRR)
  o Will be to qualifying investors only OR < £8m OR < 150 persons per EU state

Question 5

What admission documents are needed for a public offer and a non-public offer?

Answer 5

If is a non-public offer on AIM/Aquis GM –> Prepare admission document

Public offer on AIM/Aquis GM –> Prepare full PRR-compliant prospectus

Question 6

What should be the contents of a PRR compliant prospectus?

Answer 6

• Summary (not longer than 7% of prospectus or 15 pages)
• Registration document
• Securities note

Overall, prospectus must disclose information for an informed investment decisions

Question 7

Who is responsible for co-ordinating the preparation of a prospectus?

Answer 7

Firm’s adviser is responsible for co-ordinating prospectus preparation, but directors of issuer are primarily responsible for the content

Question 8

What is the application procedure for a prospectus?

Answer 8

• Draft prospectus, Form A application form and fee
• Request to omit information normally required
• Application forms
• Board resolution allotting securities (or provided within three days of approval)
• Sponsor’s declaration issuer satisfies premium listting conditions

FCA approves draft prospectus before publication

Question 9

How long before do documents need to be submitted for propectuses?

Answer 9

Ten days prior, or 20 days for new applications or complex issues

Question 10

When should a prospectus be published?

Answer 10

After FCA approval, prospectus must be made available to the public at least six days before the end of the share offer

Question 11

When is a prospectus deemed available?

Answer 11

When published on website:
- Of the company
- Of financial intermediaries placing and selling the securities
- Of the regulated market where shares will trade

Question 12

When would a full PD prospectus be required?

• Placing on NEX Growth Market to only institutional investors
• Main market capitalisation issue
• Offer for sale on main market
• 3 for 1 bonus issue on AIM

Answer 12

Offer for sale on main market.

If only to institutional investors, only an admission document is needed.

Bonus issues/capitalisation issues don’t require a prospectus

Question 13

Are annual report and accounts a required document under the Prospectus Regulation Rules?

Answer 13

No - they should have been published anyways in accordance with company requirements

Question 14

What must the firm do if a significant change has taken place after a prospectus has already been approved?

Answer 14

Submit a supplementary prospectus for approval

Question 15

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Answer 15

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