Protected forward-looking statements – Engagement Paper 3

Read Engagement Paper 3[2]

Why we are publishing this paper

Forward-looking statements, such as projections of future profitability, are useful for investors when making investment decisions.

However, the existing prospectus regime sets a liability standard for the content of a prospectus that may deter issuers from including forward-looking statements in these documents.

The new regime will create a concept of protected forward-looking statements (PFLS) that will be subject to a different liability standard that is intended to encourage companies to include forward-looking statements in prospectuses.

In this paper we set out our initial thinking on the rules we will make to specify what types of information can be considered PFLS, any conditions for how it is prepared, and how it is presented within a prospectus.

This engagement paper is part of a series of papers[3] setting out our emerging policy thinking on how we may use our rule-making powers under the new regime.

Who is this of interest to

• Publicly traded companies.
• Companies considering an admission to trading on a UK market.
• Existing and prospective investors in publicly traded companies, including institutional and individual investors.
• Law firms, investment banks and other advisers, including sponsors, who may assist issuers.
• Exchanges or venue operators.
• Intermediaries who may facilitate trading, including providing execution and/or marketing of investments into listed companies, whether at initial public offering (IPO) or in secondary markets.
• Trade associations representing the various market participants above.
• Accountancy firms and those providing support to issuers in preparing annual financial reports.
• Wider financial market participants such as research analysts.

Publication of our summary of engagement feedback - 12 December 2023

The period for submitting feedback to this Engagement Paper has closed.

We have now published a summary of the feedback[1] we received to the 6 Engagement Papers we published.

If you would like to discuss anything further about our engagement process, please email [email protected] which we will continue to monitor. 

Next steps

We are now considering the points raised and are developing our consultation proposals with a view to publishing a consultation paper in summer 2024.