New UK IPO rules could disincentivise listings

Author: Olly Jackson | Published: 5 Jul 2018

New rules in the UK are intended to provide greater clarity to investors about initial public offerings (IPOs). But there are fears that the new rules will deter smaller companies from listing and, won’t increase third party research, despite the regulators’ intentions.

"We’ve ended up with a regime that will produce some extra cost for companies, and this could cause some issues," said Nicholas Holmes, partner at Ashurst.

The new rules require businesses seeking to list to publish a registration document and hold a presentation to publish research. If companies want to treat connected and unconnected analysts the same then research can be published one day after the registration document. If the company considers unconnected investors and connected analysts separately then the company must wait seven days after the registration document before publishing research.

Previously, connected analysts gained access to company information well before unconnected analysts, which got access...