No change to pre-emption thresholds for Prospectus Regulation

On 27 July 2017, the Pre-Emption Group issued a press release concerning the exemption from the obligation to publish a prospectus up to a 20% increase in securities admitted to trading. This exemption, introduced by the new Prospectus Regulation, came into force on 20 July 2017 and raised the exemption threshold from 10% (as set out in the Prospectus Directive.)

In its press release, the Pre-Emption Group confirmed that the Investment Association and the Pensions and Lifetime Savings Association will continue to support the current overall limit of a 10% disapplication authority, as set out in the 2015 Statement of Principles - Disapplying Pre-Emption Rights. The Statement of Principles allows for two resolutions for disapplication authority - the first 5% for general corporate purposes and, when applied for, the second 5% for use only in connection with an acquisition or specified capital investment.

The Pre-Emption Group does not expect any change to the flexibility permitted by the Statement of Principles as a result of the new Prospectus Regulation.

For further information on the Prospectus Regulation, see “The new Prospectus Regulation: Key features for equity issuers.”