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COBS 11A – Underwriting and Placing – Managing Research Access during Public Offers

PostedJune 24, 2025
UpdatedJune 24, 2025
ByAndy

1. Chapter Summary

COBS 11A introduces rules governing underwriting and placing activities linked to initial public offerings (IPOs) or securities first admitted to trading. It focuses on ensuring transparency and fairness in issuer research practices, mandating that firms provide access to unconnected analysts alongside their in-house (“connected”) analysts before releasing any market-moving research. This chapter supports market integrity and diverse dissemination of information during critical periods of public offers.

2. Applicability

Applies to firms undertaking underwriting or placing services for shares or certificates being admitted to trading on a UK regulated market, requiring an approved prospectus, and intending to release investment or non-independent research prior to admission. It does not apply to non-IPO securities or firms not engaging in underwriting or placing activities.

3. Key Rules and Their Meaning

  • COBS 11A.1.1R – Centralised Process Required* “Investment firms shall have in place a centralised process to identify all underwriting and placing operations of the firm and record such information.” Firms must implement formal systems to log and oversee all underwriting and placing mandates.
  • COBS 11A.1.4BR–11A.1.4ER – Unconnected Analyst Access Requirement Before disseminating any IPO-related research, firms must either:
    1. Invite a suitable pool of unconnected analysts to join issuer discussions with connected analysts; or
    2. Offer another transparent communication route meeting disclosure standards—typically with confidentiality safeguards—completed prior to releasing any research. These rules ensure equal opportunity for independent analysts to access issuer insights.
  • COBS 11A.1.4CR–11A.1.4DR – Terms Must Be Reasonable Any access given to unconnected analysts must be on reasonable terms, which may include geographical or timing restrictions aligned with UK market norms.
  • COBS 11A.1.4ER–Delay in Research Publication Connected research may be published one day after the approved prospectus if unconnected analysts were engaged; otherwise, firms must wait seven days.
  • COBS 11A.1.9UK (Record-Keeping) Firms must document client instructions and allocation decisions and retain records of analyst access assessment and communications for five years.

4. Interpretation Notes / FCA Expectations

  • The FCA expects firms to justify analyst selection and retained records of assessments, demonstrating efforts to promote diverse research perspectives.
  • Confidentiality terms (e.g., NDAs) are allowed but must not hinder meaningful analysis or delay research unnecessarily.
  • The FCA emphasizes fairness and independence; connected analysts must not have undue advantage in pre-admission access, and both connected and unconnected analysts should be treated equitably.

5. Practical Considerations for Firms

  • Implement a centralised tracking system for all IPO underwriting mandates.
  • Develop and document criteria for selecting unconnected analysts, keeping records of rationale and list of invitees.
  • Define standard NDA templates and confidentiality terms that align with industry norms.
  • Log all analyst-access events, including attendees, format, dates, and restrictions.
  • Ensure suitable delay logic is activated in research publication systems (1-day vs 7-day rule).
  • Retain complete records of access, communications, and research timestamps for at least five years.

6. Related Handbook References

  • COBS 11 – General order-handling and best execution rules
  • PRIN 2A – Underlying principles such as integrity, transparency, and fair treatment
  • SYSC 9 – Record-keeping obligations for transactions and research
  • MAR – Market Abuse Regulation supervision
  • Prospectus Rules (PR) – Context for disclosure timing and public information standards
  • COBS 11A.12.2.21A G – FCA guidance clarifying the treatment of analysts in IPO contexts

7. Regulatory Focus / Enforcement Risk

  • The FCA monitors gaps in analyst access, especially where unconnected analysts are excluded or face unreasonable conditions—this has potential to impact fairness in IPO pricing and information symmetry.
  • Firms failing to implement the delayed publication window accurately, or lacking audit records of access events, may face enforcement scrutiny.
  • Recent FCA consultations (e.g. CP17/5) indicate evolving expectations around analyst diversity, timing, and conduct in IPOs, making compliance here a high regulatory priority.