PEG issues Statement of Principles following Secondary Capital Raising Review

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Published: 4 November 2022

On behalf of the Pre-Emption Group

The Pre-emption Group is committed to implementing in full the recommendations of the Secondary Capital Raising Review (SCRR). The Group is working to establish the governance and membership proposed by the Review and will make a further public announcement when this is complete. 
In the meantime, the revised pre-emption regime described in the SCRR is now in effect, and the Group has today issued its Statement of Priciples and template resolutions, to guide market practice in this area:

  1. Statement of Principles
  2. Template resolutions

Companies should obtain shareholder approval for capital raising under the new pre-emption Statement of Principles at their next AGM. Nevertheless, we understand that there may be urgent, exceptional circumstances between now and the next AGM where companies wish to exercise a non-pre-emptive offer under the new regime. In these circumstances, the Group recommends that issuers follow the transition arrangements within the SCRR (p.56) until such a time that shareholders can vote on the new pre-emption regime.

As with other capital raises, shareholders are likely to hold board members to account at their next AGM or limit their future pre-emptive authorities if they consider these transitional arrangements have been used inappropriately.

Notes to editors

The Financial Reporting Council (FRC) acts as Secretariat to the Pre-Emption Group. The Pre-Emption Group issues best practice documents regarding authorities to disapply pre-emption rights. The Group represents listed companies, investors and intermediaries.

The FRC’s purpose is to serve the public interest by setting high standards of corporate governance, reporting and audit and by holding to account those responsible for delivering them. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.

All media enquiries should be directed to the FRC communications team:

  • Adam Mohamed, Communications Manager, on telephone: 020 7492 2307/07920874687 [email protected]