PRM 9 Approval of a prospectus

This chapter applies to: 

(1) an applicant who submits either of the following for approval by the FCA:

     (a) a prospectus; or

     (b) a supplementary prospectus; or

(2) a person who files a universal registration document or final terms.

If the prospectus is not a single document but comprises separate documents:

(1) an application for approval may relate to one or more of those separate documents; and

(2) a reference in this section to a prospectus is, unless the context otherwise requires, to be taken to be a reference to the document or documents to which the application relates.

Reference in this section to a prospectus is, unless the context otherwise requires, to be taken as including a reference to a supplementary prospectus.  

The purpose of this chapter is to:

(1) explain the process and procedure that the FCA will adopt in order to review and scrutinise a prospectus or amendments to a prospectus:

     (a) submitted for approval; or

     (b) filed; and

(2) provide the rules that an applicant submitting a prospectus for approval or filing without prior approval must follow.

For the purposes of scrutinising the completeness of the information in a draft prospectus, the FCA may consider all of the following:

(1) whether any draft prospectus is drawn up in accordance with the rules in PRM, according to the type of issuer, the type of issuance, the type of transferable security and the type of admission to trading; and

(2)  whether the issuer has a complex financial history or has made a significant financial commitment, as referred to in in PRM 4.4.1R.

Where the FCA review carried out in accordance with PRM 9.1.5G determines any shortcomings in the draft prospectus, the FCA may require the issuer to include, modify or remove information from a draft prospectus, taking into account the following:

(1) the type of transferable securities;

(2) the information already included in the prospectus and the existence and content of information already included in a prospectus of an entity other than the issuer, as well as the applicable accounting and auditing principles;

(3) the economic nature of the transactions by which the issuer has acquired, or disposed of, its undertaking or any part of it, and the specific nature of that undertaking; and

(4) whether the issuer can obtain with reasonable effort information about the entity other than the issuer.

For the purposes of scrutinising the comprehensibility of the information in a draft prospectus, the FCA may consider whether the draft prospectus:

(1) has a clear and detailed table of contents;

(2) is free from unnecessary reiterations;

(3) groups related information together;

(4) uses an easily readable font size;

(5) has a structure that enables investors to understand its contents;

(6) defines the components of mathematical formulas and, where applicable, clearly describes the product structure;

(7) is written in plain language;

(8) clearly describes the nature of the issuer's operations and its principal activities; and

(9) explains trade or industry-specific terminology.

For the purposes of scrutinising the consistency of the information in a draft prospectus, the FCA may consider all of the following:

(1) whether the draft prospectus is free of material discrepancies between the different pieces of information contained in it, including any information incorporated by reference in accordance with PRM 5 (Incorporation by reference and use of hyperlinks);

(2) whether any material and specific risks disclosed elsewhere in the draft prospectus are included in the risk factors section;

(3) whether the information in the summary is in line with information elsewhere in the draft prospectus;

(4) whether any figures on the use of proceeds correspond to the amount of proceeds being raised and whether the disclosed use of proceeds is in line with the disclosed strategy of the issuer;

(5) whether the description of the issuer in the operating and financial review, the historical financial information, the description of the issuer's activity and the description of the risk factors are consistent; and

(6) whether the working capital statement is in line with the risk factors, the auditor’s report, the use of proceeds and the disclosed strategy of the issuer and how that strategy will be funded.

The FCA may require additional information to be included in the prospectus based on the activities of the specialist issuers falling under one of the following categories:

(1) property companies; 

(2) mineral companies;

(3) investment companies; 

(4) scientific research-based companies; 

(5) start-up companies; and 

(6) shipping companies.

Where necessary for investor protection, the FCA may apply criteria in addition to those laid down in PRM 9.1.5G to PRM 9.1.8G for the purposes of scrutinising the completeness, comprehensibility and consistency of the information in the draft prospectus.

All drafts of a prospectus must be submitted to the FCA in searchable electronic format via electronic means.

When submitting the first draft of a prospectus, the issuer or person asking for admission to trading must provide the FCA with a contact point for the FCA to submit all notifications in writing and by electronic means.

The following information must also be submitted to the FCA in searchable electronic format via electronic means:

(1) the list of cross references, where required by PRM 9.4.3R;

(2) where no list of cross references is required, a document that identifies any items set out in the PRM App 2 Annexes that, due to the nature or type of issuer, transferable securities or admission to trading, have not been included in the draft prospectus;

(3) any information that is incorporated into the prospectus by reference as referred to in PRM 5 (Incorporation by reference and use of hyperlinks), unless such information has already been approved by or filed with the FCA in searchable electronic format;

(4) any reasoned request to the FCA to authorise the omission of information from the prospectus in accordance with PRM 6(Omission of information); and

(5) any other information requested by the FCA for the purposes of the scrutiny and approval of the prospectus or the scrutiny, review and approval of the universal registration document.

In addition to the rule at PRM 9.2.3R, in respect of a universal registration document: 

(1) where the issuer is submitting a draft universal registration document for filing without prior approval and seeks to obtain the status of frequent issuer, confirmation from the issuer that, to the best of their knowledge, all regulated information has been filed and published in accordance with the rules applicable to that information over the shorter period of either: 

      (a) the past 18 months; or

      (b) the period since the obligation to disclose that regulated information commenced; or

(2) where a universal registration document is filed without prior approval, an explanation as to how a request for amendment or supplementary information as referred to in PRM 2.6.12R(1) has been taken into account in the universal registration document.

Where a universal registration document that is filed without prior approval is annotated in the margin in accordance with PRM 9.4.5R, it must be accompanied by an identical version without annotations in the margin.

(1) Subject to (2), the information referred to in PRM 9.2.3R and PRM 9.2.4R must be submitted together with the first draft of the prospectus.

(2) Where a universal registration document is filed without prior approval or where a universal registration document is amended: 

     (a) the information referred to in PRM 9.2.3R(1) to(4) and PRM 9.2.4R must be submitted at the time when the universal registration document is filed with the FCA; and

     (b) the information referred to in PRM 9.2.3R(5) must be submitted during the review process.

Where a frequent issuer informs the FCA that it intends to submit an application for approval, that frequent issuer must do so: 

(1) at least 5 working days before the date envisaged for the submission of an application for approval;

(2) in writing; and

(3) by electronic means,

indicating the PRM App 2 Annexes that are relevant for the draft prospectus.

Each version of the draft prospectus submitted after the first draft prospectus must highlight all changes made to the preceding draft and must be accompanied by an unmarked draft. 

The FCA may modify PRM 9.2.8R to accept marked extracts of the preceding draft prospectus only when limited changes have been made.

Where the FCA, in accordance with PRM 9.2.19G to PRM 9.2.20G has notified the issuer or person requesting admission to trading that the draft prospectus does not meet the standards of completeness, comprehensibility and consistency required, the subsequently submitted draft of the prospectus must be accompanied by an explanation as to how the outstanding issues notified by the FCA have been addressed.

Where changes made to a draft prospectus are self-explanatory or clearly address the outstanding issues notified by the FCA, an indication of where the changes have been made to address the outstanding issues is likely to be considered sufficient explanation for the purposes of PRM 9.2.10R.

The final draft of the prospectus must be submitted for approval together with all the information referred to in PRM 9.2.3R(2) to PRM 9.2.3R(5) and PRM 9.2.4R(2) that has changed compared with the previous submission.  

Where a sponsor is required to be appointed by an issuer under UKLR 4.2.1R(1) or UKLR 4.2.1R(1A) in respect of a prospectus or supplementary prospectus required for the admission to trading of equity shares, the FCA will not approve such prospectus or supplementary prospectus unless the issuer has submitted the declaration of the sponsor provided in accordance with UKLR 24.3.3R(1), UKLR 24.3.7R(1) or UKLR 24.3.18R, as applicable. 

(1) Where a sponsor is required to be appointed by an issuer under UKLR 4.2.1R(2) in respect of a document referred to in PRM 1.4.9R(1), the FCA will not approve such document unless the confirmation required by UKLR 24.3.3R, UKLR 24.3.7R or UKLR 24.3.19R is provided to the FCA by the issuer, as applicable.            

(2) Where a sponsor is required to be appointed by an issuer under UKLR 4.2.1R(2) in respect of a document referred to in PRM 1.4.10R, such document must not be made available to the public in accordance with PRM 1.4.10R(1) unless the confirmation required by UKLR 24.3.3R, UKLR 24.3.7R or UKLR 24.3.19R is provided to the FCA by the issuer, as applicable. 

The final draft of the prospectus must not be annotated in the margin.

Where no changes have been made to the information referred to in PRM 9.2.3R to PRM 9.2.4R, the issuer or person asking for admission to trading must confirm so in writing and by electronic means.

The FCA will acknowledge receipt of the initial application for approval of a draft prospectus or of the filing of a universal registration document or of an amendment to that universal registration document in writing and by electronic means as soon as possible and no later than by close of business on the second working day following the receipt of the application or filing.

Upon receipt of the initial application for approval of a draft prospectus and of the filing of a universal registration document, or of an amendment to that universal registration document, the FCA will inform the issuer or person asking for admission to trading of the following:

(1) the reference number of the application or of the filing; and

(2) the contact point within the FCA to which queries regarding the application or the filing may be addressed.

Where the draft prospectus does not meet the standards of completeness, comprehensibility and consistency necessary for its approval or where changes or supplementary information are needed, the FCA will inform the issuer or person asking for admission to trading thereof in writing and by electronic means. 

Where the universal registration document referred to in PRM 2.6.3R or an amendment to that universal registration document does not meet the standards of completeness, comprehensibility and consistency or where amendments or supplementary information are needed, the FCA will:

(1) inform the issuer of this in writing and by electronic means; and

(2)  where the shortcoming must be addressed without undue delay in accordance with PRM 2.6.12R(3), inform the issuer of this.

The FCA will notify the issuer or person requesting admission to trading about its decision regarding the approval of the draft prospectus in writing and by electronic means as soon as possible and by no later than by close of business of the day on which that decision is taken.

The FCA will notify the issuer or the person requesting admission to trading of its decision regarding the approval of the prospectus within 10 working day of the submission of the draft prospectus.

The time limit set out in PRM 9.3.1G may be extended to 20 working days where the admission to trading involves transferable securities issued by an issuer that does not have any transferable securities already admitted to trading.

Where the FCA finds that the draft prospectus does not meet the standards of completeness, comprehensibility and consistency necessary for its approval and/or that changes or supplementary information are needed:

(1) the FCA will inform the issuer or the person requesting the admission to trading of that fact promptly and at the latest within the time limits set out in PRM 9.3.1G, PRM 9.3.2G or PRM 9.3.4G as applicable, calculated from the submission of the draft prospectus and/or the supplementary information; and

(2) the FCA will clearly specify the changes or supplementary information that are needed.

Where PRM 9.3.3G(2) is engaged, the time limit in PRM 9.3.1G will then apply only from the date on which a revised draft prospectus or the supplementary information requested is submitted to the FCA.

Where the issuer or the person requesting the admission to trading is unable or unwilling to make the necessary changes or to provide the supplementary information requested in accordance with PRM 9.3.3G, the FCA may refuse the approval of the prospectus and terminate the review process. 

If the FCA refuses to approve a prospectus according to the guidance in PRM 9.3.5G, the FCA will notify the issuer or the person requesting admission to trading of its decision and indicate the reasons for such refusal.

The time limits referred to in PRM 9.3.1G, PRM 9.3.3G and PRM 9.3.4G will be reduced to 5 working days for a prospectus consisting of separate documents drawn up by frequent issuer s referred to in PRM 2.6.16R, subject to the frequent issuer informing the FCA at least 5 working days before the date envisaged for the submission of an application for approval.

A frequent issuer must submit an application to the FCA containing the necessary amendments to the universal registration document and, where applicable, the securities note and the summary submitted for approval.

Where the FCA does not reach a decision on the prospectus within the time limits indicated, such failure will not be deemed to constitute approval of the application.

A draft prospectus must be substantially complete prior to any submission for approval of that draft.

An applicant must take all reasonable care to ensure that any prospectus submitted for approval, for which it is responsible:

(1) contains the information that is required under PRM 2.1.1R, including the relevant information items set out in the PRM App 2 Annexes; and

(2)  is, to the best of that person's knowledge, in accordance with the facts and contains no omission likely to affect its import.

Where the order of information referred to in PRM App 1 Annex 1.1R(4) and PRM App 1 Annex 1.2R(3) is different from the order set out in the PRM App 2 Annexes, an applicant must provide the FCA with a cross-reference list identifying the pages where each disclosure item can be found in the prospectus.

The list of cross-references referred to in PRM 9.4.3R must identify any items set out in the PRM App 2 Annexes that have not been included in the draft prospectus due to the nature or type of issuer, transferable securities or admission to trading.

Where no list of cross-references is required or is not voluntarily submitted by the issuer, or person asking for admission to trading, it must be indicated in the margin of the draft prospectus to which information in the draft prospectus the relevant information items set out in the PRM App 2 Annexes correspond.

(1) The applicant must submit to the FCA by the date specified in (2):

     (a) a completed Form A;

     [Note: This form is available on the FCA website. See https://www.fca.org.uk/markets/primary-markets/forms]

     (b) the relevant fee; and 

     [Note: FEES 3 sets out the relevant fee payable to the FCA]

     (c) the first draft of the prospectus (accompanied, where relevant, by the additional information set out in PRM 9.2.3R and PRM 9.2.4R).

(2) The date referred to in (1) is:

     (a) at least 10 working days before the intended approval date of the prospectus; 

     (b) at least 20 working days before the intended approval date of the prospectus if the applicant does not have transferable securities admitted to trading; or

     (c) as soon as practicable in the case of a supplementary prospectus.

(3) The applicant must submit the final version of the draft prospectus and the additional information set out in PRM 9.2.12R, PRM 9.2.15R and PRM 9.2.16R to the FCA before midday on the day on which approval is required to be granted.

The FCA will follow the executive procedures for statutory notice decisions and statutory notice associated decisions if it:

(1) proposes to refuse to approve a prospectus; or

(2) decides to refuse to approve a prospectus after having given the applicant a written notice.

[Note: DEPP 4 sets out the executive procedures for statutory notice decisions and statutory notice associated decisions]

A prospectus must not be published unless the FCA has approved it, or all of its component parts in accordance with PRM 2.2.7R to PRM 2.2.16R (Approval of component parts of a prospectus).

Regulation 7 of the Financial Services and Markets Act 2000 (Service of Notice Regulations) 2001 (SI 2001/1420) contains provisions relating to the possible methods of serving documents on the FCA. Regulation 7 does not apply to the submission of a draft prospectus to the FCA for approval because of the provisions set out in PRM 9.1.5G to PRM 9.1.10G.

(1) Unless an exemption referred to in PRM 1.4.2R applies, where an offer is made reliant on the exemption in paragraph 6(a) of Schedule 1 to the Public Offers and Admissions to Trading Regulations, a prospectus must be made available to the public in accordance with the rules in PRM 9.5 and PRM 9.6 before the end of the offer period.

[Note: Paragraph 6(a) of Schedule 1 of the Public Offers and Admissions to Trading Regulations]

(2) Where final terms are not included in a base prospectus or supplementary prospectus, for the purposes of complying with (1), only the base prospectus is required to be made available to the public in accordance with the rules in PRM 9.5 and PRM 9.6 before the end of the offer period. 

In the case of an initial offer of a class of shares admitted to trading for the first time, the prospectus must be made available to the public in accordance with the rules in PRM 9.5  and PRM 9.6 at least 3 working days before the end of the offer period.

1. In all other cases, following approval, a prospectus must be made available to the public in accordance with the rules in PRM 9.5 andPRM 9.6 :

2. (1) at a reasonable time in advance of the admission to trading of the transferable securities involved; and

3. (2) in any event no later than the time at which the admission to trading of the transferable securities involved begins.

The prospectus, whether a single document or consisting of separate documents, will be deemed available to the public when published in electronic form on any of the following websites:

(1) the website of the issuer or the person asking for admission to trading;

(2) the website of the financial intermediaries placing or selling the securities, including paying agents; or

(3) the website of the regulated market where the admission to trading is sought.

The prospectus must be published on a dedicated section of the website which is easily accessible on entering the website. 

Access to the prospectus must not be subject to the completion of a registration process, the acceptance of a disclaimer limiting legal liability or the payment of a fee. 

Warnings specifying the jurisdiction(s) in which an offer or an admission to trading is being made will not be considered to be disclaimers limiting legal liability.

The prospectus must be made available in an electronic format that cannot be modified and is:

(1) downloadable;

(2) printable; and

(3) searchable.

The following documents, as relevant, must be accessible under the same section on the website referred to in PRM 9.5.5R, alongside the prospectus:

(1) documents that contain information incorporated by reference in accordance with PRM 5;

(2) any supplementary prospectus related to the prospectus;

(3) final terms related to the prospectus; and

(4) a separate copy of the summary, clearly indicating the prospectus to which it relates.

The following documents, as relevant, must remain publicly available in electronic form for at least 10 years after their publication on the websites referred to in PRM 9.5.3R:

(1) an approved prospectus;

(2) any approved supplementary prospectus; and

(3) final terms related to the prospectus.

Where hyperlinks are used for information incorporated by reference in the prospectus, and the supplementary prospectus and/or final terms related to the prospectus, such hyperlinks must remain functional for at least 10 years after publication of such documents.

An approved prospectus must contain a prominent warning stating when the validity of the prospectus will expire. The warning must also state that the obligation to supplement a prospectus in the event of significant new factors, material mistakes or material inaccuracies in accordance with PRM 10 does not apply when a prospectus is no longer valid.

In the case of a prospectus comprising several documents and/or incorporating information by reference in accordance with PRM 5 , the documents and information that constitute the prospectus may be published and distributed separately, provided that those documents are made available to the public in accordance with PRM 9.5.4R.

Where a prospectus consists of separate documents in accordance with PRM 2.2.7R to PRM 2.2.16R, each of those component documents, except for documents incorporated by reference in accordance with PRM 5 , must indicate that it is only one part of the prospectus and where the other component documents may be obtained.

The text and the format of the prospectus, any supplementary prospectus or final terms made available to the public, must at all times be identical to the original version approved by the FCA.

A copy of the prospectus on a durable medium must be delivered to any potential investor, upon request and free of charge, by the issuer or the person asking for admission to trading or the financial intermediaries placing or selling the transferable securities. 

In the event that a potential investor in the UK makes a specific demand for a paper copy, the persons referred to in PRM 9.5.16R must deliver a printed version of the prospectus. 

The FCA will publish on its website all the prospectuses it approves or a list of the prospectuses it has approved, with hyperlinks to the dedicated website sections referred to in PRM 9.5.4R. The published list, including the hyperlinks, will be kept up to date and each item will remain on the website for at least 10 years.

The FCA will upload documents to the national storage mechanism. The FCA will upload prospectuses and related documents it approves after 6pm on the working day following the day on which it approved the document.