Following a detailed review of the processes for both initial public offerings (‘IPOs’) and secondary capital raisings, the Association of British Insurers (‘ABI’) has recently published a report, ‘Encouraging equity investment’, containing the results of its findings and its proposals for change. Although the ABI has found that, overall, investors consider the UK system to be working satisfactorily, it has made a number of proposals aimed at improving the efficiency of the processes. Its recommendations include:
- • the continuation of the minimum free float of 25% for premium and standard listings;
- • the reduction in the size of bank syndicates;
- • the early engagement by issuers and vendors with investors (up to a year or more before a planned IPO);
- • the publication of the prospectus at an earlier stage in the IPO process;
- • the appointment of an independent board at least one month before the announcement of the intention to float;
- • enhanced protection for minority shareholders;
- • clarification of the ABI’s position on what is acceptable to investors on a non-pre-emptive secondary capital raising; and
- • improved fee disclosure for both IPOs and secondary raisings.
The timing for the next steps is not entirely clear. Press reports suggest, however, that the ABI is of the view that its proposals are likely to be enacted, or adopted by regulators as the case may be, before the current Parliament ends in 2015.
ABI Report: Encouraging equity investment: facilitation of efficient capital raising in the UK market available at: https://www.abi. org.uk/~/media/Files/Documents/Publications/Public/Migrated/ Investment%20and%20corporate%20governance/ABI%20 Encouraging%20Equity%20Investment%20report.ashx