AIC: no need for prospectus on all secondary share sales

The Association of Investment Companies (AIC) — which represents the investment trust industry — has recommended that companies should not have to prepare a prospectus for secondary issues of shares “when the shares are in the same class as others already admitted to trading on a regulated market.”

The AIC has 361 members and the investment trust industry has almost £200 billion of assets.

The recommendation came as the AIC responded to the UK Government’s Department for Business, Energy & Industrial Strategy’s Reforming Regulation Initiative.

The AIC also recommended that corporate reporting be split into separate components “to make it more helpful” for shareholders and stakeholders.

“Under the AIC’s proposals, corporate reports would comprise a Strategic Report, a Historic Report, a Bespoke Report and a Legal and Regulatory Disclosures Document,” said the AIC.

AIC CEO Ian Sayers said: “Over the past few months, technology has enabled us to live, work and socialise in new ways, highlighting just how much change is possible.

“But companies share information with the market in a very traditional and conventional way.

“Corporate reporting has become longer and more detailed but arguably that’s made it harder for investors to understand what’s really important.

“We believe there is scope for a significant review to make corporate reporting fit for the future, particularly in the UK after Brexit.

“Our proposals will help build confidence in capital markets by helping investors gain a better understanding of the companies they invest in.

“We look forward to working with the Department to see how these considerations can be addressed.”