COBS 23.6 Communication of qualifying public offers

In the event that a firm assesses that it is appropriate to facilitate a qualifying public offer, it must prepare a statement (the ‘disclosure summary’) for that offer which contains a summary of: 

(1) the information provided by the issuer or a third party to the firm for the purposes of the requirements in COBS 23.3; and

(2) the assessment of whether it is appropriate to facilitate the qualifying public offer that the firm has undertaken under COBS 23.5.

The disclosure summary must also include: 

(1) the information set out at COBS 23.6.9R(1); or 

(2) a link which, when activated, directs the client to the information set out at COBS 23.6.9R(1).

Provided that it includes all the information required by COBS 23.6.1R and COBS 23.6.2R, the disclosure summary may be prepared:

(1) in the course of the firm's activity to determine whether it is appropriate to facilitate the qualifying public offer; or

(2) after the decision to facilitate the qualifying public offer has been made.

(1) A firm is not required to include: 

    (a) proprietary or commercially sensitive information; or 

    (b) its determination as to financial viability in COBS 23.4.5R, in the disclosure summary.

(2) Firms should consider whether it is appropriate for any such information in (1)(a) to be summarised in a way that does not include the sensitive information. 

(1) In relation to each qualifying public offer that it facilitates, a firm must make available to clients:

     (a) the relevant disclosure summary prepared under COBS 23.6.1R;

     (b) the most recent financial accounts of the issuer and a confirmation of whether they have been audited;

     (c) the terms of, and any contractual documents relating to, the qualifying public offer; and

     (d) such other information as a client may require in order to make an informed and effective decision as to whether or not to participate in the qualifying public offer, including (but not limited to) being able to make an adequate assessment of the risks and benefits.

(2) The firm must make the information in (1) available to clients for as long as the qualifying public offer remains open to the public.  

(1) A firm must include in an appropriate location on its website for each qualifying public offer an indication that the firm has undertaken due diligence in relation to the offer.

(2) The statement in (1) must be presented in a way that will clearly and prominently bring it to the attention of clients. 

For as long as a qualifying public offer remains open to the public, a firm must make available in real time the amount raised by the issuer by way of that qualifying public offer.

For the purpose of COBS 23.6.5R(1)(b), a firm may provide a link which, when activated, directs the client to the relevant documents on Companies House.

Other information to be made available to the client

• A firm must:
• (1) publish on its website a comprehensive statement of its approach to:
•     (a) the due diligence required by this chapter; and 
•     (b) managing conflicts of interest between different clients (issuers and investors); and
• (2) ensure that the statements in (1) are easily accessible by clients.

For the purpose of COBS 23.6.9R, a firm may publish a copy of its relevant policies, such as its due diligence policy (prepared in accordance with COBS 23.8.1R) and its conflicts of interest policy.

The disclosure summary is intended to provide summary information about the due diligence undertaken by the firm in relation to the particular issuer and qualifying public offer, whereas the statements at COBS 23.6.9R(1) relate to the framework of how the firm carries out that due diligence and manages conflicts.  

The statements set out in  COBS 23.6.9R(1) must be presented in a way that will clearly and prominently bring them to the attention of clients.

(1) Firms are reminded that regulation 13 of the Public Offers and Admissions to Trading Regulations (Disclosure of information) applies to a qualifying public offer.

(2) The effect of regulation 13 is that if material information is disclosed by, or on behalf of, an issuer or offeror and addressed to one or more selected investors in oral or written form, that information must be disclosed to all other investors to whom the offer is addressed.

Firms are also reminded of their obligations under COBS 4 relating to: 

(1) a firm’s role in ensuring that a communication or a financial promotion is fair, clear and not misleading (COBS 4.2.1R);

(2) a firm’s role in approvingfinancial promotions, as set out in COBS 4.10, including the requirement to ensure that the name of the firm that has approved a financial promotion is included in that financial promotion (COBS 4.5.2R and COBS 4.5.2AR); 

(3) the requirements relating to the presentation of future performance information in COBS 4.6.7R; and

(4) the restrictions on the promotion of restricted mass market investments and non-mass market investments in COBS 4.12A and COBS 4.12B, respectively.