Summary: Following new rules, introduced on 1 July 2018, on the UK Main Market equity IPO process involving connected and unconnected research, AFME and the European Association of Independent Research Providers (“Euro IRP”) have produced a joint document containing guidance for syndicate banks on how to provide access to unconnected analysts in the IPO process.


Under the rules introduced in July either:

  • unconnected analysts may be offered access to the issuer’s management alongside connected analysts. If this occurs, connected research can be released from one day after an approved prospectus/registration document is published (Option I); or
  • unconnected analysts must be provided access to the issuer’s management separately, in which case there will be a minimum of seven days after an approved prospectus/registration document is published before connected/unconnected research can be released (Option II).

Whether Option I or Option II is followed, the rules require syndicate banks to ensure that a ‘range of unconnected analysts’ have the opportunity to communicate with the issuer’s team.

AFME and Euro IRP Guidance

The guidance sets out how unconnected analysts can participate in the IPO process and how issuers and firms can implement either option above. In particular, it sets out:

  • how unconnected analysts who want be in communication with the issuer team under either option must agree to comply with ‘Market Standard Research Guidelines’, set out in Appendix I, which include agreeing: (i) to keep the fact and details of the IPO confidential until the announcement of the transaction; (ii) to be bound by the same geographic restrictions relating to the distribution of research as connected analysts; (iii) not to publish their research before connected analysts are permitted to publish their research under either options; and (iv) not to publish research in the seven day period prior to pricing;
  • the manner and form that such communication with the issuer team should take. If Option II is adopted, which is likely to be the preferred option, once the registration document is published, the issuer must make a statement explaining how unconnected analysts can communicate with the issuer. For example, the statement could set out when and where a presentation will be held and require unconnected analysts to register their interest accordingly. The issuer or syndicate banks should also notify unconnected analysts on the Unconnected Analyst Lists (see below) of publication of the registration document and ask whether they are interested in receiving issuer information; and
  • guidance for ‘in person meetings’ and how to make written materials available, including any additional Q&As. If Option II is followed, any additional Q&As between the issuer and individual unconnected analysts must be made available to unconnected analysts as well as connected analysts.

To assist communication between issuer teams and unconnected analysts, Euro IRP has compiled a list, accessible through the guidance, of its member firms interested in writing research on prospective IPOs. It is envisaged that in due course other representative organisations who have compiled their own lists of unconnected analysts will add to this list (to be known as the ‘Unconnected Analysts Lists’).

It is worth noting that the FCA has engaged with AFME and Euro IRP during the development of this document.