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UK watchdog proposes IPO research shake-up to level playing field
[LONDON] Investors in planned stock market flotations will get independent research about the company sooner under proposals made by Britain's Financial Conduct Authority on Wednesday.
Under existing rules, the prospectus, which gives in-depth information about the company that plans to list, is only made available late in the initial public offering process.
Analysts at banks who are not involved in the IPO also have little access to the information they need to produce research to rival that from banks "connected" to the float.
"This is of particular concern given the conflicts of interest that arise during the production of connected research, including analysts coming under pressure to produce favourable research on an offering if their bank is to secure a place on the book-running syndicate," the FCA said in a statement.
Under the proposed rules, the prospectus would be published before the "connected" research.
Providers of independent research would also have access to the company's management before connected research is published.
"The proposals we have outlined in today's consultation paper are designed to improve the range, and timeliness of higher quality information that is available to investors during the process," Christopher Woolard, the FCA's executive director of strategy and competition, said in a statement.