The Association of Financial Markets in Europe (AFME) and the European Association for Independent Research Providers (Euro IRP) have published joint guidance on involving unconnected analysts in the initial public offering (IPO) process.


In July 2018, the Financial Conduct Authority (FCA) amended its Conduct of Business Sourcebook to address a perceived problem in the process of bringing a company’s shares to market.

The FCA was concerned that investors on an IPO were relying too heavily on analysis produced by the prospective issuer’s own financial advisers (“connected research”) and not on the issuer’s prospectus or independent analysis (“unconnected research”).

Broadly, under the new rules (which are now in force):

  • A prospective issuer’s syndicate banks must provide a range of unconnected analysts with access to the issuer’s management by one of two methods.
  • Unconnected analysts may be permitted to join connected analysts in communications with the issuer team before connected research is published (Option 1). In this case, the connected research can be published the day after the prospectus is published.
  • Alternatively, unconnected analysts can separately be given access to the issuer team and the same information as is given to connected analysts (Option 2). However, in this case, no connected research can be published until at least seven days after the prospectus is published.

These rules apply only to IPOs on a regulated market (such as the London Stock Exchange Main Market), and not on a multilateral trading facility (such as AIM or NEX Growth).

What does the new guidance say?

The guidance sets out how unconnected analysts can register their interest in gaining access to the issuer team, depending on which of the two options above is chosen. In short:

  • An unconnected analyst would be required to confirm that it will comply with Market Standard Research Guidelines set out in the guidance. This includes keeping details of the IPO confidential, observing any geographic restrictions that apply to connected research, and holding off publishing any unconnected research before any connected research can be published.
  • Under Option 1, the issuer would contact all persons registered on AFME’s “Unconnected Analysts List” and invite them to attend the analyst presentation.
  • Under Option 2, the issuer would issue a statement when publishing its registration document setting out how unconnected analysts can communicate with it. It would also notify all persons on the “Unconnected Analysts List”.
  • In both cases, an unconnected analyst wishing to participate would need to register its interest with the prospective issuer. The issuer would confirm the request as soon as reasonably practicable and normally within one business day.
  • If the issuer is holding in-person meetings, unconnected analysts would generally be given the same rights to ask questions (whether at the meeting or afterwards by email) as connected analysts.
  • If the issuer is making materials available without a meeting, it would upload certain materials to a website for unconnected analysts to access. These include the management presentation slide deck and a written note of all Q&A between the issuer and connected and unconnected analysts.