Stabilisation—pre 3 July 2016
Stabilisation—pre 3 July 2016

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

  • Stabilisation—pre 3 July 2016
  • What is stabilisation?
  • Stabilisation—potential offences
  • Stabilisation—safe harbour defence
  • Types of stabilisation activities permitted by the Price Stabilising Rules
  • Conditions
  • The stabilisation period
  • Disclosure and reporting conditions
  • Price conditions
  • Adequate public disclosure
  • more

This Practice Note considers the process of stabilisation prior to 3rd July 2016 (the date on which the Market Abuse Regulation came into force), including the potential offences that may have arisen when carrying out stabilisation and the safe harbour defences that were available, along with the requirements of the Buy-back and Stabilisation Regulation and the Financial Conduct Authority's (FCA) price stabilising rules set out in the FCA's Market Conduct Sourcebook (MAR). For details on the process of stabilisation from 3 July 2016 see Practice Note: Stabilisation—from 3 July 2016 (Market Abuse Regulation). This note and related notes on aspects of the pre-Market Abuse Regulation UK stabilisation regime have been retained for reference purposes and state the law as at 2 July 2016.

When equity securities are offered to the public by way of an initial public offer (IPO) or a secondary offer, care is taken to set the offer price at a level which reflects genuine market demand. One of the ways an IPO or secondary offer will be seen as a success will be if the securities trade in a range close to their offer price in the period immediately following such securities admission to the market. However, even where the offer price has been set at a level which correctly reflects market demand, the price at which