Guidance on Share Issuing Good Practice for Listed Companies - ACT Recommended Practice Guidance

Technical Recommendations - Bank of England - Guidance on Share Issuing Good Practice for Listed Companies

The Guidance, due to be published mid October by the Bank of England, is intended to help UK listed companies make informed choices about share issuing methods. The Guidance is structured as a list of questions or arguments which issuers should consider putting to their advisers, brokers and/or lead nderwriters. The MMC's recommendations for the content of the guidance were that it should:

1. encourage the use of tendering for sub-underwriting;
2. encourage the use of tenders which involve the whole of the sub-underwriting and which are open to as wide a group of potential sub-underwriters as practicable;
3. explain when deep-discounted rights issues are likely to be advantageous and recommend that the scrip element of such issues should always be made explicit.

The Guidance, as specified by the MMC, has been developed with the help of, and is endorsed by, the Confederation of British Industry, the Association of British Insurers, the National Association of Pension Funds, the Fund Managers Association, CISCO, The Association of Corporate Treasurers and the Hundred Group of Finance Directors.

There will be a technical annex and two appendices to the Guidance covering the following:
Technical Annex: to help companies estimate the true cost of their chosen equity raising method.

Appendix 1: Background to the Guidance
Appendix 2: Methods of bringing further securities to listing

Members are recommended to read the full text of the Guidance which will be available directly from the Bank of England (www.bankofengland.co.uk/markets/gilts/shareissuing.pdf).

A paper prepared by the Association to supplement the Guidance, giving a list of information that issuers may request from their advisers is reproduced below.