New UK Listing rules: what do they mean for issuers, advisors and the future of shareholder comms?

16/07/2024

The new UK Listing Rules first proposed by the FCA following Lord Hill's review in 2021 take effect at the end of this month. A full (and very helpful) breakdown of these new rules is outlined in this excellent article by our client Macfarlanes.

Corporate Finance documentation

What do issuers and their advisers need to know?

• The requirement for Circulars and accompanying Forms of Proxy to be sent to shareholders for Class 1 transactions has been removed;
• Likewise, the same documentation requirement for related party transactions (RPTs) has also been removed;
• Reverse takeovers still require shareholder approval entailing the mailing of a Circular and Proxy Form to shareholders, along with creation of a Prospectus where the issuer seeks to apply for re-admission to listing; and
• 'In the works': the FCA expects to relax the requirement for the production of Prospectuses, introducing a revised threshold for the issuance of further shares below which a Prospectus is not required (likely, but not confirmed, to be 40% of share capital). Prospectuses will continue to be important for investor protection and market effectiveness.

Disclosure, stakeholder engagement and digital

The move towards a more disclosure-based regime means that stakeholder engagement will change. This will impact:

• Wall Crossing and Market Sounding practices: it's likely these will come into focus, requiring more substantive processes;
• Corporate Reporting: issuers will need to consider more effective disclosure within Annual, ESG and Sustainability Reports and may see changes within the Board's composition to accomodate the inclusion of major shareholders who require greater representation and engagement;
• The GM will be under focus, with activist voting against resolutions more likely in some companies. The requirement for authority to allot shares remains unaffected by the new rules.

With the move towards a more disclosure-based regime, we're seeing a shift in the make-up of our business, with clients embracing our digital solutions including:

• The integration of a Wall Crossing / Market Sounding solution into our digital platforms, to help banks and brokers manage this often complex and time-consuming process. Given the recent FCA 'open letter' to Corporate Finance Firms warning of a tougher stance on market practices as well as the focus in the new Listing Rules, the need for a robust solution for Market Soundings and Wall Crossings will only increase;
• iRoadshow and IPO Research Online, our best-in-class electronic roadshow and IPO research platforms which c.30,000 leading investors from over 90% of the world's leading investment and wealth management firms have accessed or been granted access to;
• The integration of a Wall Crossing / Market Sounding platform will mean that banks and brokers can seamlessly transition wall-crossed investors into a secure roadshow environment, making the process easier while giving important Compliance-led protections and unrivalled management information on investor engagement with confidential materials;
• Digital Annual, ESG and Sustainability Reports, with our Best Practice content consultancy and digital design teams becoming an increasing focus given the importance of ensuring effective investor engagement. These will, of course, continue to sit alongside our 24hr typesetting, production and mailing teams.

If you'd like to find out more about any of these and how they affect you, chat with us today: hello@blackandcallow.com

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