Pre-Emption Group expectations for disapplication thresholds

Mar 08, 2018
When the Prospectus Regulation came into force last year, it introduced a new exemption from the obligation to publish a prospectus up to a 20% increase in securities admitted to trading. In light of the new threshold, the Pre-Emption Group confirmed that no change to the flexibility permitted by the Statement of Principles was expected as a consequence of the Prospectus Regulation, and that the Group continued to support the overall limit of 10% in the 2015 Statement of Principles.

While decisions about specific placings are a matter for individual shareholders, the Statement of Principles reflects a generally agreed position supported by the Investment Association and Pensions and Lifetime Savings Association. To assist in a constructive discussion between companies and shareholders, companies should be mindful of the expectations included within the Statement of Principles.

Companies and investors are encouraged to use the Pre-Emption Group’s Statement of Principles when engaging on pre-emption issues. In addition, companies are encouraged to use the template resolutions and Appendix of Best Practice in Engagement and Disclosure when applying for authority to disapply pre-emption rights and issuing shares under such an authority.

Source: Financial Reporting Council.