Private placingsSpecific regulation
Are there specific rules for the private placing of securities? What procedures must be implemented to effect a valid private placing?
In private offerings, the requirements for a prospectus in the Prospectus Directive will generally not apply - the offer will be designed to take advantage of an exemption from the public offer trigger prospectus requirement (see question 2).
However, MAR will still apply if the securities are within its scope, as will the liability under section 90 FSMA and section 89 of the 2012 Financial Services Act (see question 19).
No special procedures are required to effect a valid private placing in the UK.Investor information
What information must be made available to potential investors in connection with a private placing of securities?
Generally (for the reasons given in question 7), neither a prospectus nor listing particulars is likely to be required in connection with a private placing of securities. However, each investor will of course require adequate information as assessed by them before they make their investment decision.Transfer of placed securities
Do restrictions apply to the transferability of securities acquired in a private placing? And are any mechanisms used to enhance the liquidity of securities sold in a private placing?
No statutory restrictions apply to the transferability of listed securities acquired in a private placing. However, in the case of unlisted shares in a private limited company, it is usual for new shareholders to enter into ‘lock-up’ agreements in which they undertake not to dispose of their shares within a certain period after their allotment, in order to avoid the prohibition under section 755 of the Companies Act 2006 on public offers of shares in private companies.
Price stabilisation measures can be used to enhance the liquidity of the issued securities. Price stabilisation may contravene MAR and UK domestic legislation on insider dealing and misleading statements and impressions unless conducted in accordance with certain requirements (see question 17).