COBS 11A. 1.4 – Are you prepared for July 1st? – how IPO Research Online may help

The FCA’s Conduct of Business Initial Public Offering (IPO) Research Instrument 11A. 1.4B has wide-reaching and dramatic implications for issuers seeking to IPO, as well as their advisors. The instrument comes into effect on July 1st and, according to a number of sources, many banks and issuers are scrabbling with how best to comply with its terms.

The main purpose of the Instrument is to ensure greater fairness and transparency, effected through the invitation of ‘unconnected analysts’ alongside connected analysts to management and information about the IPO to ensure the publication of balanced research.

Under the new COBS Instrument, an issuer will not be able to interact with connected analysts until either the analyst presentation or the banks’ roles are communicated in writing by the issuer. The time and date of availability to both sets of analysts must also be recorded. A further effect of the Instrument means increasing pressure on timetables, as the issuer’s financials and accounts must be reviewed and completed within 135 days of the ITF. The knock-on effect is that two weeks of investor education may be reduced to just one week, with further pressure on Blackout periods.

This raises a number of questions: what form should access to the IPO Research take for both sets of analysts, to ensure both have simultaneous, impartial access? How can restrictions on time and geography (bearing in mind some transactions may have jurisdictional restrictions, such as the ability to offer securities into the US) be imposed?

IPO Research Online from Black&Callow provides a ready-made solution which has been successfully used on many of this year’s leading European IPOs:

  • Simultaneous availability to connected and unconnected analysts – maximise the shortening timetables
  • Jurisdictional/geographical restrictions can be easily enforced via IP recording & reporting, and via bespoke Disclaimers
  • Democratised access – online availability makes it easy for all parties to access management and information in the best way possible
  • Shortened Investor Education and Blackout periods can be managed more easily – instant availability and ability to open and close at the touch of a button
  • Better information flow – the draft Prospectus and analyst or management Presentations can be housed in one secure site, including Dynamic Watermarking to prevent dissemination
  • Full audit trail – records of all issuer, advisor, connected and unconnected analysts’ activities such as time and date of each access – uniquely down to Page Level Reporting

For more information, contact Steve Pusey or Tom Ireland at IPO Research Online on 020 3794 1720 or via [email protected]

For more information see: https://www.handbook.fca.org.uk/handbook/COBS/11A/1.html

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