Risk factor disclosure in 2019 IPOs
Risk factor disclosure in 2019 IPOs

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Risk factor disclosure in 2019 IPOs
  • Background and approach
  • Prospectus Regulation risk factor disclosure requirements
  • Main Market IPO risk factor review
  • Number of risk factors
  • Brexit risk factors
  • Qualitative disclosures
  • Number of categories
  • Sub-categories
  • Conciseness
  • More...

Lexis®PSL Corporate and Market Tracker have conducted research to examine current market trends in respect of equity capital markets (ECM) transactions in 2019.

Background and approach

For this review of risk factor disclosure, we looked at 38 prospectuses in relation to 2019 Main Market IPOs or new admissions and ten AIM admission documents published in 2019. It forms part of our annual trend report which aims to provide insight into the current dynamics of ECM activity in the UK. The other parts of our 2019 trend report comprise:

  1. IPOs in 2019—Main Market and AIM

  2. Secondary Offers in 2019—Main Market and AIM

  3. Standard listings in 2019

  4. Legal and regulatory developments in Equity Capital Markets 2019

Prospectus Regulation risk factor disclosure requirements

The Prospectus Regulation (EU) 2017/1129 introduced more prescriptive requirements relating to risk factor disclosure in prospectuses from 21 July 2019. The primary purpose of the new requirements is to ensure that investors can assess all relevant risks and make an informed decision about investing in the issuer’s securities.

Article 7 of the Prospectus Regulation provides that for an equity prospectus, the summary should contain no more than 15 risk factors grouped into two sections:

  1. a brief description of the most material risk factors specific to the issuer under a heading ‘What are the key risks that are specific to the issuer?’ (Article 7(6)(c))

  2. a brief description of the most

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