AIC welcomes Lord Hill’s prospectus recommendation in UK listing review





The Association of Investment Companies (AIC) today welcomed the announcement of Lord Hill’s recommendation for a fundamental review of the Prospectus Regime. The AIC also reiterated its call for there to be no requirement for a prospectus where an existing investment company issues new shares which are identical to those already on the stock market. The requirement to produce a prospectus should be replaced by a shorter and more straightforward document that provides investors with the information they need.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “Lord Hill is right to call for a fundamental review of when prospectuses are required. No-one has ever convincingly explained why an investor can buy shares in an investment company through the stock market using publicly available information but, when identical shares are issued by the same company, it requires a hugely complex and expensive new document.

“Few investors ever read a prospectus for these share issues as it mostly repeats information available elsewhere. The cost of this prospectus, which can run to hundreds of thousands of pounds, is particularly punitive for small issuers. In the case of an investment company issuing identical new shares, it’s a very expensive bundle of paper that serves little or no function, other than to stifle growth, and its days should be numbered.”

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