Q&As

What is an offer to the public and what are the exceptions?

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Produced in partnership with Nothando Malaba of Hogan Lovells and Maegen Morrison of Hogan Lovells
Published on LexisPSL on 11/04/2017

The following Corporate Q&A produced in partnership with Nothando Malaba of Hogan Lovells and Maegen Morrison of Hogan Lovells provides comprehensive and up to date legal information covering:

  • What is an offer to the public and what are the exceptions?

What is an offer to the public and what are the exceptions?

Offer to the public

Under section 85(1) of the Financial Services and Markets Act 2000 (FSMA 2000), it is unlawful for an offer of transferable securities to be made to the public in the UK unless an approved prospectus is made publicly available before the offer is made (the Public Offer Requirement).

The term 'offer of transferable securities to the public' is broadly defined as a communication to any person which presents sufficient information on the transferable securities to be offered and the terms on which they are offered in order to enable an investor to decide whether to acquire or subscribe for the securities (FSMA 2000, s 102B).

The 'communication' may be made in any form and by any means but note that it does not include a communication in connection with trading on a regulated market, a prescribed market or a multilateral trading facility operated by a market operator, such as normal secondary market communications. For example, the European Securities and Markets Authority (ESMA) has noted that the indication of secondary market prices on a company's website should not constitute an offer to the public provided that there are no further circumstances which might altogether amount to an offer to the public) (ESMA Q&A on Prospectuses Q.74).

It is a criminal offence to breach the

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