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financial services & regulation
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| financial promotions |
Lawyers at White & Black have extensive experience in guiding clients through capital market transactions and regularly advise on all manner of Financial Services and Markets Act 2000 and other regulatory issues.
In the field of capital markets, we advise both issuers and investors in issuers on initial public offerings. Much of this advice has significant implications for financial services regulation, both under the Prospectus Rules but also under the Financial Services and Markets Act 2000 and related statutory instruments; a good example of this being our work on compliance with the Model Code and the Disclosure and Transparency Rules.
Our work on IPOs is limited to advising issuers and their investors. We do not advise sponsors or underwriters. In advising issuers, we assist with the application procedure, due diligence, verification and take the lead in drafting the prospectus (whether in a single document or tri-partite form) which contains the information necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the company and the rights attaching to the company’s securities. We also advise directors on their responsibility statements in relation to the contents of the prospectus.
In the field of financial services regulation, we often advise clients on the issue of financial promotions (whether intended or otherwise) particularly in the context of fund-raising for high-growth companies. Given the potentially serious sanctions involved, we find that our clients understand the importance of complying with the letter of FSMA and the financial promotion regime in particular. In this, our clients benefit from our expert and trusted legal advice in the financial services and regulatory environments.
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| IPOs / flotations | |||
financial promotions
“Financial promotion” is the term used by the Financial Services and Markets Act 2000 to describe the communication of an invitation or inducement to engage in certain investment activity. It is also is defined and used by the Financial Services Authority. The issue of such promotions is highly regulated and in short only “authorised persons” can, in the course of business, make such communications (unless an exemption applies or the promotion is approved by an authorised person).
White & Black provides specialist advice concerning the issue and communication of “financial promotions” (which are regulated under the Financial Services and Markets Act 2000 and the Financial Promotions Order 2005) and more generally on the contents of investment memoranda, executive summaries and other communications to potential investors and shareholders.
In particular we help clients to avoid the criminal sanctions imposed by the Financial Services Authority for breaches of the financial promotions regime. As part of this work, we can advise on the inclusion of suitable disclaimers and notifications, the use of exemptions and safe harbors and on the interaction of the UK regime with overseas regimes, notably those in the US and continental Europe. We can also advise on:
- the territorial scope of the financial promotions regime;
- the use of approved promotions;
- real time and non-real time communications;
- combining exemptions;
- the FSA’s perimeter guidance;
- sanctions and penalties; and
- communications made over the internet.
We also advise clients on the potential implications, under the financial promotion regime, of corporate restructurings, such as those surrounding share for share exchanges carried out as part of solvent liquidations.
IPOs / flotations
We act for issuers on flotations and have experience in:
- drafting the offering document and revising it based on the comments of the IPO team and the relevant regulator;
- conducting due diligence to gather information to draft the offering document and to manage the directors’ (and company’s) potential liability;
- assisting in pre-IPO planning and housekeeping;
- delivering legal opinions (eg to provide comfort to the underwriters);
- advising directors and the company on future obligations in a listed environment and disclosure requirements particularly; and
- corporate governance best practice.
- option and other incentive schemes. We advise issuers on their existing share option schemes, working with specialist tax and employment law counsel where required;
- shareholder and investment agreements. Many companies have investment or shareholders' agreements that regulate the relationship between the shareholders. We can advise on the consequences of an IPO in the light of these agreements. This often includes advice on any sell-down rights, board appointment rights and veto powers;
- service agreements; and
- banking facilities. We will review the issuer's existing facilities to ascertain whether any specific consents are required and, working with other corporate finance advisers, will consider the adequacy of these existing facilities.