The Future of the UK IPO

Forthcoming in the Global Capital Markets Handbook ( I Chiu and I MacNeil, eds)

30 Pages Posted: 23 Feb 2022

See all articles by Jennifer Payne

Jennifer Payne

University of Oxford - Faculty of Law

Clara Martins Pereira

Durham University - Law School

Date Written: February 8, 2022

Abstract

The dominance of the classic IPO model as a capital raising device has come under threat in the last two decades. Companies are increasingly reluctant to go public—and those that do so increasingly gravitate towards methods that reformulate or entirely depart from traditional IPO structures. The UK’s exit from the EU on 31 December 2020 has provided the UK with the opportunity to assess whether its rules still offer the right regulatory regime for IPOs. This paper analyses how traditional IPO structures have been evolving in the UK. It considers how the development of alternative investment models has been impinging on the classic IPO model and it examines the extent to which new and proposed regulatory changes have learned from these developments in order to strike a satisfactory regulatory balance between issuers and investors. Ultimately, it is argued that the changes to date are modest and stay largely within the confines of existing frameworks, despite the claims that they comprise a fundamental overhaul of the regime. Although some caution is desirable particularly where investor protection concerns arise, the limited nature of these changes means that the reforms to the UK regime may fail to achieve the much-needed revitalisation of the UK IPO.

Keywords: UK listing reform, UK prospectus reform, IPOs, dual class shares, SPACs, direct listings

JEL Classification: K22

Suggested Citation

Payne, Jennifer and Martins Pereira, Clara, The Future of the UK IPO (February 8, 2022). Forthcoming in the Global Capital Markets Handbook ( I Chiu and I MacNeil, eds) , Available at SSRN: https://ssrn.com/abstract=4029933 or http://dx.doi.org/10.2139/ssrn.4029933

Jennifer Payne (Contact Author)

University of Oxford - Faculty of Law ( email )

Oxford
United Kingdom

Clara Martins Pereira

Durham University - Law School ( email )

50 North Bailey
Palatine Centre
Durham, County Durham DH1 3ET
United Kingdom

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